456.HK WACC - Weighted Average Cost of Capital

The WACC of New City Development Group Ltd (456.HK) is 7.2%.

The Cost of Equity of New City Development Group Ltd (456.HK) is 6.70%.

The Cost of Debt of New City Development Group Ltd (456.HK) is 7.50%.

	Range	Selected
Cost of equity	5.60% - 7.80%	6.70%
Tax rate	1.30% - 4.10%	2.70%
Cost of debt	7.00% - 8.00%	7.50%
WACC	6.8% - 7.7%	7.2%

WACC

456.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.80%

Tax rate	1.30%	4.10%
Debt/Equity ratio	10.96	10.96
Cost of debt	7.00%	8.00%

After-tax WACC	6.8%	7.7%


Selected WACC	7.2%

456.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 456.HK:

cost_of_equity (6.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.