2048.HK WACC - Weighted Average Cost of Capital

The WACC of E-House (China) Enterprise Holdings Ltd (2048.HK) is 8.6%.

The Cost of Equity of E-House (China) Enterprise Holdings Ltd (2048.HK) is 80.05%.

The Cost of Debt of E-House (China) Enterprise Holdings Ltd (2048.HK) is 5.50%.

	Range	Selected
Cost of equity	34.20% - 125.90%	80.05%
Tax rate	2.30% - 4.50%	3.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.3% - 12.0%	8.6%

WACC

2048.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.25	17.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	34.20%	125.90%

Tax rate	2.30%	4.50%
Debt/Equity ratio	21.49	21.49
Cost of debt	4.00%	7.00%

After-tax WACC	5.3%	12.0%


Selected WACC	8.6%

2048.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 2048.HK:

cost_of_equity (80.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.25) + 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.