1996.HK WACC - Weighted Average Cost of Capital

The WACC of Redsun Properties Group Ltd (1996.HK) is 7.1%.

The Cost of Equity of Redsun Properties Group Ltd (1996.HK) is 199.75%.

The Cost of Debt of Redsun Properties Group Ltd (1996.HK) is 7.00%.

	Range	Selected
Cost of equity	108.40% - 291.10%	199.75%
Tax rate	15.40% - 27.00%	21.20%
Cost of debt	7.00% - 7.00%	7.00%
WACC	6.7% - 7.5%	7.1%

WACC

1996.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	17.65	41.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	108.40%	291.10%

Tax rate	15.40%	27.00%
Debt/Equity ratio	121.15	121.15
Cost of debt	7.00%	7.00%

After-tax WACC	6.7%	7.5%


Selected WACC	7.1%

1996.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 1996.HK:

cost_of_equity (199.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (17.65) + 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.