2048.HK WACC - Weighted Average Cost of Capital

The WACC of E-House (China) Enterprise Holdings Ltd (2048.HK) is 8.3%.

The Cost of Equity of E-House (China) Enterprise Holdings Ltd (2048.HK) is 85.20%.

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

	Range	Selected
Cost of equity	32.30% - 138.10%	85.20%
Tax rate	2.30% - 4.50%	3.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 11.7%	8.3%

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	4.92	19.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	32.30%	138.10%

Tax rate	2.30%	4.50%
Debt/Equity ratio	25.36	25.36
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	11.7%


Selected WACC	8.3%

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 (85.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.92) + 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.