21.HK WACC - Weighted Average Cost of Capital
The WACC of Great China Properties Holdings Ltd (21.HK) is 5.6%.
| Range | Selected | |
| Cost of equity | 4.9% - 6.4% | 5.65% |
| Tax rate | 2.0% - 2.5% | 2.25% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.8% - 6.3% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.33 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 6.4% |
| Tax rate | 2.0% | 2.5% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.8% | 6.3% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 21.HK | Great China Properties Holdings Ltd | 0.03 | 0.3 | 0.29 |
| 191.HK | Lai Sun Garment International Ltd | 53.99 | 0.34 | 0.01 |
| 202.HK | EverChina Intl Holdings Co Ltd | 0.59 | -0.15 | -0.1 |
| 2183.HK | Sansheng Holdings Group Co Ltd | 8.43 | -0.03 | 0 |
| 277.HK | Tern Properties Co Ltd | 0.09 | 0.1 | 0.1 |
| 495.HK | Paladin Ltd | 6.8 | 0.51 | 0.07 |
| 583.HK | Great Wall Pan Asia Holdings Ltd | 15.56 | 0.04 | 0 |
| 613.HK | Planetree International Development Ltd | 0.13 | 0.39 | 0.34 |
| 93.HK | Termbray Industries International (Holdings) Ltd | 0.18 | 0.03 | 0.03 |
| 938.HK | Man Sang International Ltd | 7.18 | -1.05 | -0.13 |
| Low | High | |
| Unlevered beta | 0 | 0.04 |
| Relevered beta | 0 | 0.04 |
| Adjusted relevered beta | 0.33 | 0.36 |
21.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 21.HK:
cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.