6816.HK
Prosper Construction Holdings Ltd
Price:  
0.11 
HKD
Volume:  
10,000
Hong Kong | Construction & Engineering

6816.HK WACC - Weighted Average Cost of Capital

The WACC of Prosper Construction Holdings Ltd (6816.HK) is 5.6%.

The Cost of Equity of Prosper Construction Holdings Ltd (6816.HK) is 40%.
The Cost of Debt of Prosper Construction Holdings Ltd (6816.HK) is 6.45%.

RangeSelected
Cost of equity34.9% - 45.1%40%
Tax rate29.3% - 44.6%36.95%
Cost of debt5.9% - 7.0%6.45%
WACC5.5% - 5.7%5.6%
WACC

6816.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta5.355.91
Additional risk adjustments0.0%0.5%
Cost of equity34.9%45.1%
Tax rate29.3%44.6%
Debt/Equity ratio
21.6621.66
Cost of debt5.9%7.0%
After-tax WACC5.5%5.7%
Selected WACC5.6%

6816.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 6816.HK:

cost_of_equity (40.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.35) + 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.