1638.HK WACC - Weighted Average Cost of Capital

The WACC of Kaisa Group Holdings Ltd. (1638.HK) is 4.6%.

The Cost of Equity of Kaisa Group Holdings Ltd. (1638.HK) is 43.40%.

The Cost of Debt of Kaisa Group Holdings Ltd. (1638.HK) is 5.00%.

	Range	Selected
Cost of equity	30.20% - 56.60%	43.40%
Tax rate	4.20% - 23.10%	13.65%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.0% - 4.2%	4.6%

WACC

1638.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.57	7.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	30.20%	56.60%

Tax rate	4.20%	23.10%
Debt/Equity ratio	137.06	137.06
Cost of debt	5.00%	5.00%

After-tax WACC	5.0%	4.2%


Selected WACC	4.6%

1638.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 1638.HK:

cost_of_equity (43.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.57) + 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.