2048.HK WACC - Weighted Average Cost of Capital

The WACC of E-House (China) Enterprise Holdings Ltd (2048.HK) is 8.4%.

The Cost of Equity of E-House (China) Enterprise Holdings Ltd (2048.HK) is 82.75%.

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

	Range	Selected
Cost of equity	31.80% - 133.70%	82.75%
Tax rate	2.30% - 4.50%	3.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 11.8%	8.4%

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	4.83	18.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	31.80%	133.70%

Tax rate	2.30%	4.50%
Debt/Equity ratio	24.06	24.06
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	11.8%


Selected WACC	8.4%

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 (82.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.83) + 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.