59.HK WACC - Weighted Average Cost of Capital

The WACC of Skyfame Realty (Holdings) Ltd (59.HK) is 5.3%.

The Cost of Equity of Skyfame Realty (Holdings) Ltd (59.HK) is 136.45%.

The Cost of Debt of Skyfame Realty (Holdings) Ltd (59.HK) is 7.45%.

	Range	Selected
Cost of equity	86.40% - 186.50%	136.45%
Tax rate	31.50% - 47.50%	39.50%
Cost of debt	7.00% - 7.90%	7.45%
WACC	5.3% - 5.2%	5.3%

WACC

59.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	13.96	26.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	86.40%	186.50%

Tax rate	31.50%	47.50%
Debt/Equity ratio	163.5	163.5
Cost of debt	7.00%	7.90%

After-tax WACC	5.3%	5.2%


Selected WACC	5.3%

59.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 59.HK:

cost_of_equity (136.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (13.96) + 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.