16.HK
Sun Hung Kai Properties Ltd
Price:  
92.6 
HKD
Volume:  
3,844,407
Hong Kong | Real Estate Management & Development

16.HK WACC - Weighted Average Cost of Capital

The WACC of Sun Hung Kai Properties Ltd (16.HK) is 5.7%.

The Cost of Equity of Sun Hung Kai Properties Ltd (16.HK) is 6.8%.
The Cost of Debt of Sun Hung Kai Properties Ltd (16.HK) is 4.25%.

RangeSelected
Cost of equity5.7% - 7.9%6.8%
Tax rate17.4% - 18.8%18.1%
Cost of debt4.0% - 4.5%4.25%
WACC4.9% - 6.5%5.7%
WACC

16.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.480.58
Additional risk adjustments0.0%0.5%
Cost of equity5.7%7.9%
Tax rate17.4%18.8%
Debt/Equity ratio
0.480.48
Cost of debt4.0%4.5%
After-tax WACC4.9%6.5%
Selected WACC5.7%

16.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 16.HK:

cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.