160.HK WACC - Weighted Average Cost of Capital

The WACC of Hon Kwok Land Investment Co Ltd (160.HK) is 6.3%.

The Cost of Equity of Hon Kwok Land Investment Co Ltd (160.HK) is 17.20%.

The Cost of Debt of Hon Kwok Land Investment Co Ltd (160.HK) is 6.60%.

	Range	Selected
Cost of equity	8.10% - 26.30%	17.20%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.10% - 8.10%	6.60%
WACC	4.3% - 8.2%	6.3%

WACC

160.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.87	3.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	26.30%

Tax rate	22.10%	22.30%
Debt/Equity ratio	9.27	9.27
Cost of debt	5.10%	8.10%

After-tax WACC	4.3%	8.2%


Selected WACC	6.3%

160.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 160.HK:

cost_of_equity (17.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.87) + 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.