3913.HK WACC - Weighted Average Cost of Capital

The WACC of Kwg Living Group Holdings Ltd (3913.HK) is 22.2%.

The Cost of Equity of Kwg Living Group Holdings Ltd (3913.HK) is 14.90%.

The Cost of Debt of Kwg Living Group Holdings Ltd (3913.HK) is 43.45%.

	Range	Selected
Cost of equity	12.40% - 17.40%	14.90%
Tax rate	25.80% - 37.00%	31.40%
Cost of debt	7.00% - 79.90%	43.45%
WACC	8.3% - 36.1%	22.2%

WACC

3913.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.6	1.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	17.40%

Tax rate	25.80%	37.00%
Debt/Equity ratio	1.32	1.32
Cost of debt	7.00%	79.90%

After-tax WACC	8.3%	36.1%


Selected WACC	22.2%

3913.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 3913.HK:

cost_of_equity (14.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.6) + 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.