2282.HK WACC - Weighted Average Cost of Capital

The WACC of MGM China Holdings Ltd (2282.HK) is 7.4%.

The Cost of Equity of MGM China Holdings Ltd (2282.HK) is 8.90%.

The Cost of Debt of MGM China Holdings Ltd (2282.HK) is 5.60%.

	Range	Selected
Cost of equity	7.30% - 10.50%	8.90%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	4.60% - 6.60%	5.60%
WACC	6.1% - 8.7%	7.4%

WACC

2282.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.74	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	10.50%

Tax rate	0.40%	0.50%
Debt/Equity ratio	0.84	0.84
Cost of debt	4.60%	6.60%

After-tax WACC	6.1%	8.7%


Selected WACC	7.4%

2282.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 2282.HK:

cost_of_equity (8.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.