410.HK WACC - Weighted Average Cost of Capital

The WACC of Soho China Ltd (410.HK) is 6.2%.

The Cost of Equity of Soho China Ltd (410.HK) is 18.30%.

The Cost of Debt of Soho China Ltd (410.HK) is 5.50%.

	Range	Selected
Cost of equity	15.40% - 21.20%	18.30%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.8% - 7.6%	6.2%

WACC

410.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.1	2.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	21.20%

Tax rate	22.10%	22.30%
Debt/Equity ratio	6.36	6.36
Cost of debt	4.00%	7.00%

After-tax WACC	4.8%	7.6%


Selected WACC	6.2%

410.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 410.HK:

cost_of_equity (18.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.1) + 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.