169.HK
Wanda Hotel Development Co Ltd
Price:  
0.71 
HKD
Volume:  
2,778,400.00
Hong Kong | Real Estate Management & Development
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169.HK WACC - Weighted Average Cost of Capital

The WACC of Wanda Hotel Development Co Ltd (169.HK) is 5.7%.

The Cost of Equity of Wanda Hotel Development Co Ltd (169.HK) is 5.65%.
The Cost of Debt of Wanda Hotel Development Co Ltd (169.HK) is 8.90%.

Range Selected
Cost of equity 4.90% - 6.40% 5.65%
Tax rate 26.30% - 30.20% 28.25%
Cost of debt 7.00% - 10.80% 8.90%
WACC 4.9% - 6.5% 5.7%
WACC

169.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.34 0.36
Additional risk adjustments 0.0% 0.5%
Cost of equity 4.90% 6.40%
Tax rate 26.30% 30.20%
Debt/Equity ratio 0.1 0.1
Cost of debt 7.00% 10.80%
After-tax WACC 4.9% 6.5%
Selected WACC 5.7%

169.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 169.HK:

cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.