71.HK WACC - Weighted Average Cost of Capital
The WACC of Miramar Hotel and Investment Co Ltd (71.HK) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.5% - 8.0% | 6.75% |
| Tax rate | 14.7% - 17.7% | 16.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.4% - 8.0% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.44 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 8.0% |
| Tax rate | 14.7% | 17.7% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.4% | 8.0% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 71.HK | Miramar Hotel and Investment Co Ltd | 0.01 | 0.17 | 0.17 |
| 1189.HK | Greater Bay Area Dynamic Growth Holding Ltd | 0.59 | 1.36 | 0.91 |
| 181.HK | Fujian Holdings Ltd | 0.01 | 0.69 | 0.68 |
| 184.HK | Keck Seng Investments Hong Kong Ltd | 1.75 | 0.5 | 0.2 |
| 22.HK | Mexan Ltd | 0.5 | 1.8 | 1.27 |
| 45.HK | Hongkong and Shanghai Hotels Ltd | 1.75 | 0.33 | 0.13 |
| 617.HK | Paliburg Holdings Ltd | 47.25 | 0.94 | 0.02 |
| 78.HK | Regal Hotels International Holdings Ltd | 37.34 | 0.49 | 0.02 |
| EIHOTEL.NS | EIH Ltd | 0.01 | 0.85 | 0.84 |
| M04.SI | Mandarin Oriental International Ltd | 0.18 | 0.15 | 0.13 |
| Low | High | |
| Unlevered beta | 0.16 | 0.39 |
| Relevered beta | 0.16 | 0.4 |
| Adjusted relevered beta | 0.44 | 0.6 |
71.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 71.HK:
cost_of_equity (6.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.