456.HK WACC - Weighted Average Cost of Capital

The WACC of New City Development Group Ltd (456.HK) is 6.9%.

The Cost of Equity of New City Development Group Ltd (456.HK) is 7.10%.

The Cost of Debt of New City Development Group Ltd (456.HK) is 7.40%.

	Range	Selected
Cost of equity	6.20% - 8.00%	7.10%
Tax rate	5.00% - 9.40%	7.20%
Cost of debt	7.00% - 7.80%	7.40%
WACC	6.6% - 7.3%	6.9%

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	0.55	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.00%

Tax rate	5.00%	9.40%
Debt/Equity ratio	4.31	4.31
Cost of debt	7.00%	7.80%

After-tax WACC	6.6%	7.3%


Selected WACC	6.9%

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 (7.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.