200.HK WACC - Weighted Average Cost of Capital
The WACC of Melco International Development Ltd (200.HK) is 9.7%.
| Range | Selected | |
| Cost of equity | 6.4% - 11.0% | 8.7% |
| Tax rate | 0.4% - 1.5% | 0.95% |
| Cost of debt | 5.3% - 14.6% | 9.95% |
| WACC | 5.4% - 14.0% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.59 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 11.0% |
| Tax rate | 0.4% | 1.5% |
| Debt/Equity ratio | 7.77 | 7.77 |
| Cost of debt | 5.3% | 14.6% |
| After-tax WACC | 5.4% | 14.0% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 200.HK | Melco International Development Ltd | 7.77 | 1.04 | 0.12 |
| 102.HK | Summit Ascent Holdings Ltd | 0.81 | 0.25 | 0.14 |
| 1076.HK | Imperial Pacific International Holdings Ltd | 8.31 | 1.12 | 0.12 |
| 1443.HK | Fulum Group Holdings Ltd | 9.94 | -0.16 | -0.02 |
| 27.HK | Galaxy Entertainment Group Ltd | 0.04 | 0.85 | 0.83 |
| 296.HK | Emperor Entertainment Hotel Ltd | 0.17 | 0.79 | 0.68 |
| 355.HK | Century City International Holdings Ltd | 172.76 | 0.72 | 0 |
| 617.HK | Paliburg Holdings Ltd | 56.24 | 0.93 | 0.02 |
| 78.HK | Regal Hotels International Holdings Ltd | 37.74 | 0.45 | 0.01 |
| GENTING.KL | Genting Bhd | 2.23 | 0.27 | 0.08 |
| Low | High | |
| Unlevered beta | 0.06 | 0.12 |
| Relevered beta | 0.39 | 1.04 |
| Adjusted relevered beta | 0.59 | 1.03 |
200.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 200.HK:
cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.