The WACC of International Business Settlement Holdings Ltd (147.HK) is 5.5%.
Range | Selected | |
Cost of equity | 4.9% - 6.6% | 5.75% |
Tax rate | 7.8% - 13.3% | 10.55% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.5% - 6.4% | 5.5% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.35 | 0.39 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.9% | 6.6% |
Tax rate | 7.8% | 13.3% |
Debt/Equity ratio | 0.52 | 0.52 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.5% | 6.4% |
Selected WACC | 5.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
147.HK | International Business Settlement Holdings Ltd | 0.52 | 4.04 | 2.76 |
1125.HK | Lai Fung Holdings Ltd | 26.12 | 0.32 | 0.01 |
1218.HK | Easyknit International Holdings Ltd | 27.37 | -0.07 | 0 |
1278.HK | China New Town Development Co Ltd | 1.89 | 0.96 | 0.36 |
160.HK | Hon Kwok Land Investment Co Ltd | 8.39 | 0.35 | 0.04 |
2892.HK | Million Cities Holdings Ltd | 0 | -0.22 | -0.22 |
298.HK | Chuang's China Investments Ltd | 2.54 | 1.08 | 0.33 |
3688.HK | Top Spring International Holdings Ltd | 11.63 | 1.04 | 0.09 |
432.HK | Pacific Century Premium Developments Ltd | 24.02 | 0.4 | 0.02 |
938.HK | Man Sang International Ltd | 8.14 | -1.08 | -0.13 |
989.HK | Ground International Development Ltd | 3.4 | 1.77 | 0.44 |
Low | High | |
Unlevered beta | 0.02 | 0.09 |
Relevered beta | 0.03 | 0.09 |
Adjusted relevered beta | 0.35 | 0.39 |
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 147.HK:
cost_of_equity (5.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.