519.HK WACC - Weighted Average Cost of Capital

The WACC of Applied Development Holdings Ltd (519.HK) is 5.2%.

The Cost of Equity of Applied Development Holdings Ltd (519.HK) is 5.85%.

The Cost of Debt of Applied Development Holdings Ltd (519.HK) is 4.25%.

	Range	Selected
Cost of equity	5.10% - 6.60%	5.85%
Tax rate	1.00% - 3.40%	2.20%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.7% - 5.8%	5.2%

WACC

519.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.4

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

Tax rate	1.00%	3.40%
Debt/Equity ratio	0.6	0.6
Cost of debt	4.00%	4.50%

After-tax WACC	4.7%	5.8%


Selected WACC	5.2%

519.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 519.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.