219.HK WACC - Weighted Average Cost of Capital

The WACC of Shun Ho Property Investments Ltd (219.HK) is 8.4%.

The Cost of Equity of Shun Ho Property Investments Ltd (219.HK) is 13.80%.

The Cost of Debt of Shun Ho Property Investments Ltd (219.HK) is 7.70%.

	Range	Selected
Cost of equity	8.60% - 19.00%	13.80%
Tax rate	7.00% - 14.60%	10.80%
Cost of debt	4.00% - 11.40%	7.70%
WACC	4.9% - 12.0%	8.4%

WACC

219.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	2.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	19.00%

Tax rate	7.00%	14.60%
Debt/Equity ratio	3.11	3.11
Cost of debt	4.00%	11.40%

After-tax WACC	4.9%	12.0%


Selected WACC	8.4%

219.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 219.HK:

cost_of_equity (13.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.