2892.HK WACC - Weighted Average Cost of Capital
The WACC of Million Cities Holdings Ltd (2892.HK) is 5.7%.
| Range | Selected | |
| Cost of equity | 4.9% - 6.5% | 5.7% |
| Tax rate | 27.9% - 41.5% | 34.7% |
| Cost of debt | 7.0% - 19.5% | 13.25% |
| WACC | 4.9% - 6.5% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.34 | 0.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 6.5% |
| Tax rate | 27.9% | 41.5% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.0% | 19.5% |
| After-tax WACC | 4.9% | 6.5% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2892.HK | Million Cities Holdings Ltd | 0 | -0.22 | -0.22 |
| 1125.HK | Lai Fung Holdings Ltd | 27.82 | 0.34 | 0.02 |
| 1218.HK | Easyknit International Holdings Ltd | 21.99 | -0.13 | -0.01 |
| 1278.HK | China New Town Development Co Ltd | 2.52 | 1 | 0.38 |
| 216.HK | Chinney Investments Ltd | 23.9 | 0.55 | 0.03 |
| 298.HK | Chuang's China Investments Ltd | 2.58 | 1.08 | 0.4 |
| 3688.HK | Top Spring International Holdings Ltd | 14.1 | 1.05 | 0.1 |
| 432.HK | Pacific Century Premium Developments Ltd | 24.14 | 0.4 | 0.02 |
| 865.HK | Jiande International Holdings Ltd | 0 | 1.42 | 1.41 |
| 938.HK | Man Sang International Ltd | 7.18 | -1.05 | -0.19 |
| Low | High | |
| Unlevered beta | 0.02 | 0.06 |
| Relevered beta | 0.01 | 0.06 |
| Adjusted relevered beta | 0.34 | 0.37 |
2892.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 2892.HK:
cost_of_equity (5.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.