1895.HK
Xinyuan Property Management Service (Cayman) Ltd
Price:  
0.58 
HKD
Volume:  
104,000
China | Real Estate Management & Development

1895.HK WACC - Weighted Average Cost of Capital

The WACC of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 8.4%.

The Cost of Equity of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 9.05%.
The Cost of Debt of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 5%.

RangeSelected
Cost of equity7.4% - 10.7%9.05%
Tax rate22.5% - 30.2%26.35%
Cost of debt5.0% - 5.0%5%
WACC6.9% - 9.8%8.4%
WACC

1895.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.760.98
Additional risk adjustments0.0%0.5%
Cost of equity7.4%10.7%
Tax rate22.5%30.2%
Debt/Equity ratio
0.150.15
Cost of debt5.0%5.0%
After-tax WACC6.9%9.8%
Selected WACC8.4%

1895.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 1895.HK:

cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.