225.HK
Pokfulam Development Co Ltd
Price:  
5.20 
HKD
Volume:  
10,000.00
Hong Kong | Real Estate Management & Development
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225.HK WACC - Weighted Average Cost of Capital

The WACC of Pokfulam Development Co Ltd (225.HK) is 5.8%.

The Cost of Equity of Pokfulam Development Co Ltd (225.HK) is 6.55%.
The Cost of Debt of Pokfulam Development Co Ltd (225.HK) is 5.00%.

Range Selected
Cost of equity 5.40% - 7.70% 6.55%
Tax rate 6.30% - 12.10% 9.20%
Cost of debt 4.60% - 5.40% 5.00%
WACC 5.0% - 6.5% 5.8%
WACC

225.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.43 0.55
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.70%
Tax rate 6.30% 12.10%
Debt/Equity ratio 0.67 0.67
Cost of debt 4.60% 5.40%
After-tax WACC 5.0% 6.5%
Selected WACC 5.8%

225.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 225.HK:

cost_of_equity (6.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.