488.HK WACC - Weighted Average Cost of Capital

The WACC of Lai Sun Development Co Ltd (488.HK) is 7.0%.

The Cost of Equity of Lai Sun Development Co Ltd (488.HK) is 8.55%.

The Cost of Debt of Lai Sun Development Co Ltd (488.HK) is 7.65%.

	Range	Selected
Cost of equity	7.30% - 9.80%	8.55%
Tax rate	7.10% - 10.60%	8.85%
Cost of debt	7.00% - 8.30%	7.65%
WACC	6.5% - 7.5%	7.0%

WACC

488.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.74	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.80%

Tax rate	7.10%	10.60%
Debt/Equity ratio	25.33	25.33
Cost of debt	7.00%	8.30%

After-tax WACC	6.5%	7.5%


Selected WACC	7.0%

488.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 488.HK:

cost_of_equity (8.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.