2777.HK WACC - Weighted Average Cost of Capital

The WACC of Guangzhou R&F Properties Co Ltd (2777.HK) is 4.4%.

The Cost of Equity of Guangzhou R&F Properties Co Ltd (2777.HK) is 13.85%.

The Cost of Debt of Guangzhou R&F Properties Co Ltd (2777.HK) is 5.50%.

	Range	Selected
Cost of equity	11.00% - 16.70%	13.85%
Tax rate	20.00% - 30.00%	25.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.5% - 5.3%	4.4%

WACC

2777.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.35	1.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	16.70%

Tax rate	20.00%	30.00%
Debt/Equity ratio	27.15	27.15
Cost of debt	4.00%	7.00%

After-tax WACC	3.5%	5.3%


Selected WACC	4.4%

2777.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 2777.HK:

cost_of_equity (13.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.35) + 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.