823.HK
Link Real Estate Investment Trust
Price:  
36.90 
HKD
Volume:  
6,687,306.00
Hong Kong | Equity Real Estate Investment Trusts (REITs)
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823.HK WACC - Weighted Average Cost of Capital

The WACC of Link Real Estate Investment Trust (823.HK) is 5.8%.

The Cost of Equity of Link Real Estate Investment Trust (823.HK) is 7.25%.
The Cost of Debt of Link Real Estate Investment Trust (823.HK) is 4.55%.

Range Selected
Cost of equity 6.20% - 8.30% 7.25%
Tax rate 11.50% - 32.80% 22.15%
Cost of debt 4.00% - 5.10% 4.55%
WACC 5.2% - 6.4% 5.8%
WACC

823.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.56 0.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 8.30%
Tax rate 11.50% 32.80%
Debt/Equity ratio 0.66 0.66
Cost of debt 4.00% 5.10%
After-tax WACC 5.2% 6.4%
Selected WACC 5.8%

823.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 823.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.