12.HK
Henderson Land Development Co Ltd
Price:  
24.55 
HKD
Volume:  
8,767,681
Hong Kong | Real Estate Management & Development

12.HK WACC - Weighted Average Cost of Capital

The WACC of Henderson Land Development Co Ltd (12.HK) is 8.8%.

The Cost of Equity of Henderson Land Development Co Ltd (12.HK) is 6.6%.
The Cost of Debt of Henderson Land Development Co Ltd (12.HK) is 11.95%.

RangeSelected
Cost of equity5.2% - 8.0%6.6%
Tax rate11.7% - 12.4%12.05%
Cost of debt4.0% - 19.9%11.95%
WACC4.3% - 13.3%8.8%
WACC

12.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.390.6
Additional risk adjustments0.0%0.5%
Cost of equity5.2%8.0%
Tax rate11.7%12.4%
Debt/Equity ratio
1.291.29
Cost of debt4.0%19.9%
After-tax WACC4.3%13.3%
Selected WACC8.8%

12.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 12.HK:

cost_of_equity (6.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.