124.HK WACC - Weighted Average Cost of Capital

The WACC of Guangdong Land Holdings Ltd (124.HK) is 7.0%.

The Cost of Equity of Guangdong Land Holdings Ltd (124.HK) is 10.85%.

The Cost of Debt of Guangdong Land Holdings Ltd (124.HK) is 12.20%.

	Range	Selected
Cost of equity	7.90% - 13.80%	10.85%
Tax rate	36.00% - 45.00%	40.50%
Cost of debt	4.50% - 19.90%	12.20%
WACC	3.0% - 11.0%	7.0%

WACC

124.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.84	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	13.80%

Tax rate	36.00%	45.00%
Debt/Equity ratio	54.76	54.76
Cost of debt	4.50%	19.90%

After-tax WACC	3.0%	11.0%


Selected WACC	7.0%

124.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 124.HK:

cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.