14.HK WACC - Weighted Average Cost of Capital

The WACC of Hysan Development Co Ltd (14.HK) is 5.8%.

The Cost of Equity of Hysan Development Co Ltd (14.HK) is 8.70%.

The Cost of Debt of Hysan Development Co Ltd (14.HK) is 6.85%.

	Range	Selected
Cost of equity	7.20% - 10.20%	8.70%
Tax rate	31.30% - 45.10%	38.20%
Cost of debt	5.60% - 8.10%	6.85%
WACC	5.1% - 6.6%	5.8%

WACC

14.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.73	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.20%

Tax rate	31.30%	45.10%
Debt/Equity ratio	1.71	1.71
Cost of debt	5.60%	8.10%

After-tax WACC	5.1%	6.6%


Selected WACC	5.8%

14.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 14.HK:

cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.73) + 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.