1680.HK WACC - Weighted Average Cost of Capital

The WACC of Macau Legend Development Ltd (1680.HK) is 6.5%.

The Cost of Equity of Macau Legend Development Ltd (1680.HK) is 14.25%.

The Cost of Debt of Macau Legend Development Ltd (1680.HK) is 5.90%.

	Range	Selected
Cost of equity	7.30% - 21.20%	14.25%
Tax rate	6.30% - 11.80%	9.05%
Cost of debt	4.80% - 7.00%	5.90%
WACC	4.8% - 8.2%	6.5%

WACC

1680.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.75	2.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	21.20%

Tax rate	6.30%	11.80%
Debt/Equity ratio	6.49	6.49
Cost of debt	4.80%	7.00%

After-tax WACC	4.8%	8.2%


Selected WACC	6.5%

1680.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 1680.HK:

cost_of_equity (14.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.75) + 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.