1321.HK WACC - Weighted Average Cost of Capital

The WACC of China New City Commercial Development Ltd (1321.HK) is 7.0%.

The Cost of Equity of China New City Commercial Development Ltd (1321.HK) is 17.75%.

The Cost of Debt of China New City Commercial Development Ltd (1321.HK) is 5.10%.

	Range	Selected
Cost of equity	10.00% - 25.50%	17.75%
Tax rate	10.20% - 29.30%	19.75%
Cost of debt	4.00% - 6.20%	5.10%
WACC	5.0% - 9.0%	7.0%

WACC

1321.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.2	3.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	25.50%

Tax rate	10.20%	29.30%
Debt/Equity ratio	3.51	3.51
Cost of debt	4.00%	6.20%

After-tax WACC	5.0%	9.0%


Selected WACC	7.0%

1321.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 1321.HK:

cost_of_equity (17.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.2) + 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.