497.HK WACC - Weighted Average Cost of Capital

The WACC of CSI Properties Ltd (497.HK) is 11.4%.

The Cost of Equity of CSI Properties Ltd (497.HK) is 5.85%.

The Cost of Debt of CSI Properties Ltd (497.HK) is 13.70%.

	Range	Selected
Cost of equity	5.10% - 6.60%	5.85%
Tax rate	5.40% - 6.40%	5.90%
Cost of debt	4.50% - 22.90%	13.70%
WACC	4.4% - 18.5%	11.4%

WACC

497.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.60%

Tax rate	5.40%	6.40%
Debt/Equity ratio	4.07	4.07
Cost of debt	4.50%	22.90%

After-tax WACC	4.4%	18.5%


Selected WACC	11.4%

497.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 497.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.