1560.HK WACC - Weighted Average Cost of Capital

The WACC of Star Properties Group (Cayman Islands) Ltd (1560.HK) is 6.3%.

The Cost of Equity of Star Properties Group (Cayman Islands) Ltd (1560.HK) is 8.65%.

The Cost of Debt of Star Properties Group (Cayman Islands) Ltd (1560.HK) is 6.35%.

	Range	Selected
Cost of equity	6.10% - 11.20%	8.65%
Tax rate	1.80% - 3.10%	2.45%
Cost of debt	5.70% - 7.00%	6.35%
WACC	5.6% - 7.0%	6.3%

WACC

1560.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	11.20%

Tax rate	1.80%	3.10%
Debt/Equity ratio	21.69	21.69
Cost of debt	5.70%	7.00%

After-tax WACC	5.6%	7.0%


Selected WACC	6.3%

1560.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 1560.HK:

cost_of_equity (8.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.