1426.HK WACC - Weighted Average Cost of Capital

The WACC of Spring Real Estate Investment Trust (1426.HK) is 6.2%.

The Cost of Equity of Spring Real Estate Investment Trust (1426.HK) is 10.80%.

The Cost of Debt of Spring Real Estate Investment Trust (1426.HK) is 5.25%.

	Range	Selected
Cost of equity	7.80% - 13.80%	10.80%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 6.50%	5.25%
WACC	4.6% - 7.9%	6.2%

WACC

1426.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	13.80%

Tax rate	22.10%	22.30%
Debt/Equity ratio	2.11	2.11
Cost of debt	4.00%	6.50%

After-tax WACC	4.6%	7.9%


Selected WACC	6.2%

1426.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 1426.HK:

cost_of_equity (10.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.