34.HK WACC - Weighted Average Cost of Capital

The WACC of Kowloon Development Co Ltd (34.HK) is 8.6%.

The Cost of Equity of Kowloon Development Co Ltd (34.HK) is 7.50%.

The Cost of Debt of Kowloon Development Co Ltd (34.HK) is 11.95%.

	Range	Selected
Cost of equity	6.50% - 8.50%	7.50%
Tax rate	21.80% - 27.10%	24.45%
Cost of debt	4.00% - 19.90%	11.95%
WACC	3.7% - 13.5%	8.6%

WACC

34.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.62	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.50%

Tax rate	21.80%	27.10%
Debt/Equity ratio	5.28	5.28
Cost of debt	4.00%	19.90%

After-tax WACC	3.7%	13.5%


Selected WACC	8.6%

34.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 34.HK:

cost_of_equity (7.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.