101.HK WACC - Weighted Average Cost of Capital

The WACC of Hang Lung Properties Ltd (101.HK) is 6.2%.

The Cost of Equity of Hang Lung Properties Ltd (101.HK) is 11.50%.

The Cost of Debt of Hang Lung Properties Ltd (101.HK) is 5.00%.

	Range	Selected
Cost of equity	8.10% - 14.90%	11.50%
Tax rate	28.30% - 31.90%	30.10%
Cost of debt	4.00% - 6.00%	5.00%
WACC	4.7% - 7.8%	6.2%

WACC

101.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.88	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	14.90%

Tax rate	28.30%	31.90%
Debt/Equity ratio	1.96	1.96
Cost of debt	4.00%	6.00%

After-tax WACC	4.7%	7.8%


Selected WACC	6.2%

101.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 101.HK:

cost_of_equity (11.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.