736.HK WACC - Weighted Average Cost of Capital

The WACC of China Properties Investment Holdings Ltd (736.HK) is 7.4%.

The Cost of Equity of China Properties Investment Holdings Ltd (736.HK) is 14.45%.

The Cost of Debt of China Properties Investment Holdings Ltd (736.HK) is 5.35%.

	Range	Selected
Cost of equity	12.60% - 16.30%	14.45%
Tax rate	5.70% - 14.10%	9.90%
Cost of debt	4.00% - 6.70%	5.35%
WACC	6.2% - 8.7%	7.4%

WACC

736.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.62	1.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	16.30%

Tax rate	5.70%	14.10%
Debt/Equity ratio	2.62	2.62
Cost of debt	4.00%	6.70%

After-tax WACC	6.2%	8.7%


Selected WACC	7.4%

736.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 736.HK:

cost_of_equity (14.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.62) + 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.