1821.HK WACC - Weighted Average Cost of Capital

The WACC of ESR Cayman Ltd (1821.HK) is 5.9%.

The Cost of Equity of ESR Cayman Ltd (1821.HK) is 6.70%.

The Cost of Debt of ESR Cayman Ltd (1821.HK) is 6.55%.

	Range	Selected
Cost of equity	5.10% - 8.30%	6.70%
Tax rate	22.20% - 22.90%	22.55%
Cost of debt	6.10% - 7.00%	6.55%
WACC	4.9% - 6.9%	5.9%

WACC

1821.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	8.30%

Tax rate	22.20%	22.90%
Debt/Equity ratio	0.88	0.88
Cost of debt	6.10%	7.00%

After-tax WACC	4.9%	6.9%


Selected WACC	5.9%

1821.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 1821.HK:

cost_of_equity (6.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.