160.HK WACC - Weighted Average Cost of Capital

The WACC of Hon Kwok Land Investment Co Ltd (160.HK) is 8.1%.

The Cost of Equity of Hon Kwok Land Investment Co Ltd (160.HK) is 14.55%.

The Cost of Debt of Hon Kwok Land Investment Co Ltd (160.HK) is 9.45%.

	Range	Selected
Cost of equity	7.60% - 21.50%	14.55%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.30% - 14.60%	9.45%
WACC	3.8% - 12.4%	8.1%

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	0.79	2.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	21.50%

Tax rate	22.10%	22.30%
Debt/Equity ratio	8.47	8.47
Cost of debt	4.30%	14.60%

After-tax WACC	3.8%	12.4%


Selected WACC	8.1%

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 (14.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.