563.HK WACC - Weighted Average Cost of Capital

The WACC of Shanghai Industrial Urban Development Group Ltd (563.HK) is 6.0%.

The Cost of Equity of Shanghai Industrial Urban Development Group Ltd (563.HK) is 12.90%.

The Cost of Debt of Shanghai Industrial Urban Development Group Ltd (563.HK) is 7.00%.

	Range	Selected
Cost of equity	9.40% - 16.40%	12.90%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.90% - 8.10%	7.00%
WACC	4.9% - 7.0%	6.0%

WACC

563.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.09	1.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	16.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	12.73	12.73
Cost of debt	5.90%	8.10%

After-tax WACC	4.9%	7.0%


Selected WACC	6.0%

563.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 563.HK:

cost_of_equity (12.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.