247.HK WACC - Weighted Average Cost of Capital
The WACC of Tsim Sha Tsui Properties Ltd (247.HK) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.3% - 6.7% | 6% |
| Tax rate | 16.2% - 18.9% | 17.55% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.2% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.4 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 6.7% |
| Tax rate | 16.2% | 18.9% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.2% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 247.HK | Tsim Sha Tsui Properties Ltd | 0.04 | 0.14 | 0.14 |
| 1224.HK | C C Land Holdings Ltd | 2.22 | 0.32 | 0.12 |
| 185.HK | Zensun Enterprises Ltd | 105.08 | 0.13 | 0 |
| 208.HK | Polytec Asset Holdings Ltd | 0.28 | 0.69 | 0.56 |
| 34.HK | Kowloon Development Co Ltd | 5.11 | 0.64 | 0.12 |
| 497.HK | CSI Properties Ltd | 4.59 | 0.55 | 0.12 |
| 563.HK | Shanghai Industrial Urban Development Group Ltd | 12.52 | 0.84 | 0.07 |
| 6166.HK | China Vast Industrial Urban Development Company Ltd | 1.74 | 0.27 | 0.11 |
| 845.HK | Glorious Property Holdings Ltd | 316.75 | 1.36 | 0.01 |
| 95.HK | LVGEM (China) Real Estate Investment Co Ltd | 26.54 | 1.91 | 0.08 |
| Low | High | |
| Unlevered beta | 0.1 | 0.12 |
| Relevered beta | 0.1 | 0.12 |
| Adjusted relevered beta | 0.4 | 0.41 |
247.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 247.HK:
cost_of_equity (6.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.