8268.HK WACC - Weighted Average Cost of Capital

The WACC of Smart City Development Holdings Ltd (8268.HK) is 5.4%.

The Cost of Equity of Smart City Development Holdings Ltd (8268.HK) is 5.35%.

The Cost of Debt of Smart City Development Holdings Ltd (8268.HK) is 7.30%.

	Range	Selected
Cost of equity	4.50% - 6.20%	5.35%
Tax rate	7.30% - 7.60%	7.45%
Cost of debt	7.00% - 7.60%	7.30%
WACC	4.5% - 6.2%	5.4%

WACC

8268.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.27	0.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.50%	6.20%

Tax rate	7.30%	7.60%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.00%	7.60%

After-tax WACC	4.5%	6.2%


Selected WACC	5.4%

8268.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 8268.HK:

cost_of_equity (5.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.27) + 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.