160.HK WACC - Weighted Average Cost of Capital
The WACC of Hon Kwok Land Investment Co Ltd (160.HK) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 9.0% | 7.6% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 4.4% - 14.6% | 9.5% |
| WACC | 3.7% - 11.1% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.56 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 9.0% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 8.83 | 8.83 |
| Cost of debt | 4.4% | 14.6% |
| After-tax WACC | 3.7% | 11.1% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 160.HK | Hon Kwok Land Investment Co Ltd | 8.83 | 0.42 | 0.05 |
| 1125.HK | Lai Fung Holdings Ltd | 26.35 | 0.42 | 0.02 |
| 1207.HK | SRE Group Ltd | 20.86 | 1.23 | 0.07 |
| 1278.HK | China New Town Development Co Ltd | 3.43 | 0.75 | 0.2 |
| 216.HK | Chinney Investments Ltd | 22.72 | 0.53 | 0.03 |
| 2892.HK | Million Cities Holdings Ltd | 0 | -0.18 | -0.18 |
| 298.HK | Chuang's China Investments Ltd | 2.52 | 1.1 | 0.37 |
| 3688.HK | Top Spring International Holdings Ltd | 14.1 | 0.98 | 0.08 |
| 865.HK | Jiande International Holdings Ltd | 0 | 1.51 | 1.51 |
| 938.HK | Man Sang International Ltd | 4.42 | -1.11 | -0.25 |
| Low | High | |
| Unlevered beta | 0.04 | 0.08 |
| Relevered beta | 0.34 | 0.6 |
| Adjusted relevered beta | 0.56 | 0.73 |
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 (7.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.