78.HK WACC - Weighted Average Cost of Capital
The WACC of Regal Hotels International Holdings Ltd (78.HK) is 5.9%.
| Range | Selected | |
| Cost of equity | 6.5% - 9.6% | 8.05% |
| Tax rate | 1.3% - 2.2% | 1.75% |
| Cost of debt | 4.8% - 7.0% | 5.9% |
| WACC | 4.8% - 6.9% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.6 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 9.6% |
| Tax rate | 1.3% | 2.2% |
| Debt/Equity ratio | 30.46 | 30.46 |
| Cost of debt | 4.8% | 7.0% |
| After-tax WACC | 4.8% | 6.9% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 78.HK | Regal Hotels International Holdings Ltd | 30.46 | 0.49 | 0.02 |
| 126.HK | Carrianna Group Holdings Company Ltd | 9.69 | 0.36 | 0.03 |
| 1355.HK | Legend Strategy International Holdings Group Company Ltd | 1.68 | -0.2 | -0.07 |
| 184.HK | Keck Seng Investments Hong Kong Ltd | 1.6 | 0.51 | 0.2 |
| 219.HK | Shun Ho Property Investments Ltd | 3.11 | 0.18 | 0.04 |
| 253.HK | Shun Ho Holdings Ltd | 7.91 | 0.27 | 0.03 |
| 292.HK | Asia Standard Hotel Group Ltd | 37.96 | 0.34 | 0.01 |
| 355.HK | Century City International Holdings Ltd | 172.76 | 0.79 | 0 |
| 617.HK | Paliburg Holdings Ltd | 51.35 | 1 | 0.02 |
| 8237.HK | Link Holdings Ltd | 15.53 | 0.15 | 0.01 |
| Low | High | |
| Unlevered beta | 0.01 | 0.02 |
| Relevered beta | 0.4 | 0.73 |
| Adjusted relevered beta | 0.6 | 0.82 |
78.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 78.HK:
cost_of_equity (8.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.