1668.HK WACC - Weighted Average Cost of Capital

The WACC of China South City Holdings Ltd (1668.HK) is 6.1%.

The Cost of Equity of China South City Holdings Ltd (1668.HK) is 7.20%.

The Cost of Debt of China South City Holdings Ltd (1668.HK) is 7.20%.

	Range	Selected
Cost of equity	6.00% - 8.40%	7.20%
Tax rate	12.40% - 20.60%	16.50%
Cost of debt	7.00% - 7.40%	7.20%
WACC	6.1% - 6.0%	6.1%

WACC

1668.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.53	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.40%

Tax rate	12.40%	20.60%
Debt/Equity ratio	23.78	23.78
Cost of debt	7.00%	7.40%

After-tax WACC	6.1%	6.0%


Selected WACC	6.1%

1668.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 1668.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.