The WACC of Landing International Development Ltd (582.HK) is 6.4%.
Range | Selected | |
Cost of equity | 5.2% - 7.2% | 6.2% |
Tax rate | 0.4% - 1.0% | 0.7% |
Cost of debt | 6.1% - 7.0% | 6.55% |
WACC | 5.9% - 7.0% | 6.4% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.39 | 0.48 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.2% | 7.2% |
Tax rate | 0.4% | 1.0% |
Debt/Equity ratio | 5.24 | 5.24 |
Cost of debt | 6.1% | 7.0% |
After-tax WACC | 5.9% | 7.0% |
Selected WACC | 6.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
582.HK | Landing International Development Ltd | 5.24 | -0.24 | -0.04 |
1125.HK | Lai Fung Holdings Ltd | 26.12 | 0.32 | 0.01 |
1207.HK | SRE Group Ltd | 20.98 | 1.23 | 0.06 |
169.HK | Wanda Hotel Development Co Ltd | 0.1 | 0.39 | 0.36 |
216.HK | Chinney Investments Ltd | 23.9 | 0.56 | 0.02 |
2892.HK | Million Cities Holdings Ltd | 0 | -0.22 | -0.22 |
367.HK | Chuang's Consortium International Ltd | 5.02 | 0.64 | 0.11 |
3688.HK | Top Spring International Holdings Ltd | 11.63 | 1.04 | 0.08 |
726.HK | DIT Group Ltd | 7.13 | 0.13 | 0.02 |
938.HK | Man Sang International Ltd | 8.14 | -1.08 | -0.12 |
Low | High | |
Unlevered beta | 0.01 | 0.04 |
Relevered beta | 0.09 | 0.22 |
Adjusted relevered beta | 0.39 | 0.48 |
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 582.HK:
cost_of_equity (6.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.