272.HK WACC - Weighted Average Cost of Capital

The WACC of Shui On Land Ltd (272.HK) is 7.8%.

The Cost of Equity of Shui On Land Ltd (272.HK) is 24.20%.

The Cost of Debt of Shui On Land Ltd (272.HK) is 6.85%.

	Range	Selected
Cost of equity	17.90% - 30.50%	24.20%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.60% - 8.10%	6.85%
WACC	6.1% - 9.4%	7.8%

WACC

272.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.51	3.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.90%	30.50%

Tax rate	22.10%	22.30%
Debt/Equity ratio	6.69	6.69
Cost of debt	5.60%	8.10%

After-tax WACC	6.1%	9.4%


Selected WACC	7.8%

272.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 272.HK:

cost_of_equity (24.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.51) + 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.