9998.HK WACC - Weighted Average Cost of Capital

The WACC of Kwan Yong Holdings Ltd (9998.HK) is 5.5%.

The Cost of Equity of Kwan Yong Holdings Ltd (9998.HK) is 5.35%.

The Cost of Debt of Kwan Yong Holdings Ltd (9998.HK) is 6.05%.

	Range	Selected
Cost of equity	4.60% - 6.10%	5.35%
Tax rate	2.60% - 2.90%	2.75%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.5% - 6.4%	5.5%

WACC

9998.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.29	0.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.60%	6.10%

Tax rate	2.60%	2.90%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.00%	8.10%

After-tax WACC	4.5%	6.4%


Selected WACC	5.5%

9998.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 9998.HK:

cost_of_equity (5.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.29) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.