535.HK WACC - Weighted Average Cost of Capital

The WACC of Gemdale Properties and Investment Corporation Ltd (535.HK) is 8.8%.

The Cost of Equity of Gemdale Properties and Investment Corporation Ltd (535.HK) is 19.55%.

The Cost of Debt of Gemdale Properties and Investment Corporation Ltd (535.HK) is 9.85%.

	Range	Selected
Cost of equity	13.10% - 26.00%	19.55%
Tax rate	22.10% - 27.50%	24.80%
Cost of debt	7.00% - 12.70%	9.85%
WACC	6.4% - 11.2%	8.8%

WACC

535.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.71	3.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.10%	26.00%

Tax rate	22.10%	27.50%
Debt/Equity ratio	7.21	7.21
Cost of debt	7.00%	12.70%

After-tax WACC	6.4%	11.2%


Selected WACC	8.8%

535.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 535.HK:

cost_of_equity (19.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.71) + 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.