2282.HK WACC - Weighted Average Cost of Capital

The WACC of MGM China Holdings Ltd (2282.HK) is 8.7%.

The Cost of Equity of MGM China Holdings Ltd (2282.HK) is 10.75%.

The Cost of Debt of MGM China Holdings Ltd (2282.HK) is 4.95%.

	Range	Selected
Cost of equity	9.50% - 12.00%	10.75%
Tax rate	1.00% - 1.30%	1.15%
Cost of debt	4.30% - 5.60%	4.95%
WACC	7.7% - 9.7%	8.7%

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	1.12	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	12.00%

Tax rate	1.00%	1.30%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.30%	5.60%

After-tax WACC	7.7%	9.7%


Selected WACC	8.7%

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 (10.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.