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 9.90%.

The Cost of Debt of New Century Real Estate Investment Trust (1275.HK) is 8.50%.

	Range	Selected
Cost of equity	8.50% - 11.30%	9.90%
Tax rate	22.50% - 22.60%	22.55%
Cost of debt	4.00% - 13.00%	8.50%
WACC	5.7% - 10.7%	8.2%

WACC

1275.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	1.02	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.30%

Tax rate	22.50%	22.60%
Debt/Equity ratio	1.05	1.05
Cost of debt	4.00%	13.00%

After-tax WACC	5.7%	10.7%


Selected WACC	8.2%

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.