2168.HK WACC - Weighted Average Cost of Capital

The WACC of Kaisa Prosperity Holdings Ltd (2168.HK) is 9.6%.

The Cost of Equity of Kaisa Prosperity Holdings Ltd (2168.HK) is 9.75%.

The Cost of Debt of Kaisa Prosperity Holdings Ltd (2168.HK) is 4.70%.

	Range	Selected
Cost of equity	8.30% - 11.20%	9.75%
Tax rate	25.90% - 30.90%	28.40%
Cost of debt	4.00% - 5.40%	4.70%
WACC	8.2% - 11.1%	9.6%

WACC

2168.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.91	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.20%

Tax rate	25.90%	30.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	5.40%

After-tax WACC	8.2%	11.1%


Selected WACC	9.6%

2168.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 2168.HK:

cost_of_equity (9.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.