123.HK WACC - Weighted Average Cost of Capital

The WACC of Yuexiu Property Co Ltd (123.HK) is 7.3%.

The Cost of Equity of Yuexiu Property Co Ltd (123.HK) is 7.45%.

The Cost of Debt of Yuexiu Property Co Ltd (123.HK) is 13.95%.

	Range	Selected
Cost of equity	5.60% - 9.30%	7.45%
Tax rate	45.20% - 48.40%	46.80%
Cost of debt	5.00% - 22.90%	13.95%
WACC	3.1% - 11.5%	7.3%

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	0.45	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	9.30%

Tax rate	45.20%	48.40%
Debt/Equity ratio	8.04	8.04
Cost of debt	5.00%	22.90%

After-tax WACC	3.1%	11.5%


Selected WACC	7.3%

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 (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.