106.HK WACC - Weighted Average Cost of Capital

The WACC of Landsea Green Properties Co Ltd (106.HK) is 5.1%.

The Cost of Equity of Landsea Green Properties Co Ltd (106.HK) is 13.15%.

The Cost of Debt of Landsea Green Properties Co Ltd (106.HK) is 7.40%.

	Range	Selected
Cost of equity	10.20% - 16.10%	13.15%
Tax rate	24.30% - 38.60%	31.45%
Cost of debt	7.00% - 7.80%	7.40%
WACC	5.3% - 4.9%	5.1%

WACC

106.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.23	1.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	16.10%

Tax rate	24.30%	38.60%
Debt/Equity ratio	113.08	113.08
Cost of debt	7.00%	7.80%

After-tax WACC	5.3%	4.9%


Selected WACC	5.1%

106.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 106.HK:

cost_of_equity (13.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.23) + 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.