53.HK WACC - Weighted Average Cost of Capital
The WACC of Guoco Group Ltd (53.HK) is 5.4%.
| Range | Selected | |
| Cost of equity | 5.9% - 11.4% | 8.65% |
| Tax rate | 7.1% - 12.2% | 9.65% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.4% - 6.4% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.5 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 11.4% |
| Tax rate | 7.1% | 12.2% |
| Debt/Equity ratio | 1.98 | 1.98 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.4% | 6.4% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 53.HK | Guoco Group Ltd | 1.98 | 0.25 | 0.09 |
| 000009.SZ | China Baoan Group Co Ltd | 0.89 | 1.32 | 0.73 |
| 138.HK | CCT Fortis Holdings Ltd | 14.45 | -0.11 | -0.01 |
| 242.HK | Shun Tak Holdings Ltd | 8.17 | 0.79 | 0.09 |
| 25.HK | Chevalier International Holdings Ltd | 3.8 | 0.31 | 0.07 |
| 274.HK | China Billion Resources Ltd | 5.67 | 0.03 | 0 |
| 659.HK | NWS Holdings Ltd | 1.01 | 0.34 | 0.18 |
| APARINDS.NS | Apar Industries Ltd | 0.01 | 1.61 | 1.59 |
| ARAD.TA | Arad Investment & Industrial Development Ltd | 0.87 | 1.49 | 0.83 |
| SIEMENS.NS | Siemens Ltd | 0 | 1.65 | 1.65 |
| Low | High | |
| Unlevered beta | 0.09 | 0.4 |
| Relevered beta | 0.25 | 1.12 |
| Adjusted relevered beta | 0.5 | 1.08 |
53.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 53.HK:
cost_of_equity (8.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.