The WACC of New City Development Group Ltd (456.HK) is 7.6%.
Range | Selected | |
Cost of equity | 5.7% - 7.9% | 6.8% |
Tax rate | 1.3% - 4.1% | 2.7% |
Cost of debt | 7.0% - 8.7% | 7.85% |
WACC | 6.8% - 8.3% | 7.6% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.47 | 0.58 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 7.9% |
Tax rate | 1.3% | 4.1% |
Debt/Equity ratio | 11.61 | 11.61 |
Cost of debt | 7.0% | 8.7% |
After-tax WACC | 6.8% | 8.3% |
Selected WACC | 7.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
456.HK | New City Development Group Ltd | 11.61 | 1.24 | 0.1 |
115.HK | Grand Field Group Holdings Ltd | 14.86 | 0.22 | 0.01 |
131.HK | Cheuk Nang Holdings Ltd | 1.61 | 0.05 | 0.02 |
183.HK | Winfull Group Holdings Ltd | 1.72 | 0.1 | 0.04 |
287.HK | Winfair Investment Co Ltd | 0.1 | -0.1 | -0.09 |
367.HK | Chuang's Consortium International Ltd | 6.81 | 0.63 | 0.08 |
593.HK | DreamEast Group Ltd | 56.64 | -0.7 | -0.01 |
655.HK | Hongkong Chinese Ltd | 0.9 | 0.45 | 0.24 |
859.HK | Zhongchang International Holdings Group Ltd | 7.92 | 0.23 | 0.03 |
996.HK | Carnival Group International Holdings Ltd | 124.79 | -0.35 | 0 |
Low | High | |
Unlevered beta | 0.02 | 0.03 |
Relevered beta | 0.21 | 0.37 |
Adjusted relevered beta | 0.47 | 0.58 |
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 456.HK:
cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.