123.HK WACC - Weighted Average Cost of Capital

The WACC of Yuexiu Property Co Ltd (123.HK) is 8.1%.

The Cost of Equity of Yuexiu Property Co Ltd (123.HK) is 10.45%.

The Cost of Debt of Yuexiu Property Co Ltd (123.HK) is 9.90%.

	Range	Selected
Cost of equity	7.90% - 13.00%	10.45%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.20% - 14.60%	9.90%
WACC	4.6% - 11.6%	8.1%

WACC

123.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	13.00%

Tax rate	22.10%	22.30%
Debt/Equity ratio	6.16	6.16
Cost of debt	5.20%	14.60%

After-tax WACC	4.6%	11.6%


Selected WACC	8.1%

123.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 123.HK:

cost_of_equity (10.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.