2663.HK WACC - Weighted Average Cost of Capital

The WACC of KPA-BM Holdings Ltd (2663.HK) is 6.6%.

The Cost of Equity of KPA-BM Holdings Ltd (2663.HK) is 6.65%.

The Cost of Debt of KPA-BM Holdings Ltd (2663.HK) is 7.35%.

	Range	Selected
Cost of equity	5.10% - 8.20%	6.65%
Tax rate	16.20% - 17.30%	16.75%
Cost of debt	4.00% - 10.70%	7.35%
WACC	5.0% - 8.2%	6.6%

WACC

2663.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	8.20%

Tax rate	16.20%	17.30%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	10.70%

After-tax WACC	5.0%	8.2%


Selected WACC	6.6%

2663.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 2663.HK:

cost_of_equity (6.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.