755.HK WACC - Weighted Average Cost of Capital

The WACC of Shanghai Zendai Property Ltd (755.HK) is 10.5%.

The Cost of Equity of Shanghai Zendai Property Ltd (755.HK) is 6.25%.

The Cost of Debt of Shanghai Zendai Property Ltd (755.HK) is 12.35%.

	Range	Selected
Cost of equity	5.50% - 7.00%	6.25%
Tax rate	4.00% - 6.40%	5.20%
Cost of debt	10.10% - 14.60%	12.35%
WACC	8.8% - 12.2%	10.5%

WACC

755.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.38

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.50%	7.00%

Tax rate	4.00%	6.40%
Debt/Equity ratio	3.56	3.56
Cost of debt	10.10%	14.60%

After-tax WACC	8.8%	12.2%


Selected WACC	10.5%

755.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 755.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.