1243.HK WACC - Weighted Average Cost of Capital

The WACC of Wang On Properties Ltd (1243.HK) is 5.8%.

The Cost of Equity of Wang On Properties Ltd (1243.HK) is 5.90%.

The Cost of Debt of Wang On Properties Ltd (1243.HK) is 5.85%.

	Range	Selected
Cost of equity	5.00% - 6.80%	5.90%
Tax rate	1.40% - 2.10%	1.75%
Cost of debt	4.70% - 7.00%	5.85%
WACC	4.7% - 6.8%	5.8%

WACC

1243.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	6.80%

Tax rate	1.40%	2.10%
Debt/Equity ratio	6.72	6.72
Cost of debt	4.70%	7.00%

After-tax WACC	4.7%	6.8%


Selected WACC	5.8%

1243.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 1243.HK:

cost_of_equity (5.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.