1275.HK
New Century Real Estate Investment Trust
Price:  
2.01 
HKD
Volume:  
56,600
Hong Kong | Equity Real Estate Investment Trusts (REITs)

1275.HK WACC - Weighted Average Cost of Capital

The WACC of New Century Real Estate Investment Trust (1275.HK) is 8.2%.

The Cost of Equity of New Century Real Estate Investment Trust (1275.HK) is 9.9%.
The Cost of Debt of New Century Real Estate Investment Trust (1275.HK) is 8.5%.

RangeSelected
Cost of equity8.5% - 11.3%9.9%
Tax rate22.5% - 22.6%22.55%
Cost of debt4.0% - 13.0%8.5%
WACC5.7% - 10.7%8.2%
WACC

1275.HK WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.3%6.3%
Adjusted beta1.021.15
Additional risk adjustments0.0%0.5%
Cost of equity8.5%11.3%
Tax rate22.5%22.6%
Debt/Equity ratio
1.051.05
Cost of debt4.0%13.0%
After-tax WACC5.7%10.7%
Selected WACC8.2%

1275.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 1275.HK:

cost_of_equity (9.90%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (1.02) + 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.