The WACC of Sino Land Co Ltd (83.HK) is 6.3%.
Range | Selected | |
Cost of equity | 5.3% - 7.3% | 6.3% |
Tax rate | 16.2% - 18.9% | 17.55% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.3% - 7.3% | 6.3% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.4 | 0.5 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 7.3% |
Tax rate | 16.2% | 18.9% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.3% | 7.3% |
Selected WACC | 6.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
83.HK | Sino Land Co Ltd | 0.01 | 0.49 | 0.49 |
101.HK | Hang Lung Properties Ltd | 1.57 | 1.22 | 0.53 |
115.HK | Grand Field Group Holdings Ltd | 14.86 | 0.22 | 0.02 |
131.HK | Cheuk Nang Holdings Ltd | 1.61 | 0.05 | 0.02 |
173.HK | K. Wah International Holdings Ltd | 2.29 | 0.68 | 0.24 |
28.HK | Tian An China Investments Co Ltd | 0.92 | 0.59 | 0.34 |
367.HK | Chuang's Consortium International Ltd | 6.81 | 0.63 | 0.1 |
456.HK | New City Development Group Ltd | 11.61 | 1.24 | 0.12 |
655.HK | Hongkong Chinese Ltd | 0.9 | 0.45 | 0.26 |
996.HK | Carnival Group International Holdings Ltd | 124.79 | -0.35 | 0 |
Low | High | |
Unlevered beta | 0.11 | 0.25 |
Relevered beta | 0.1 | 0.25 |
Adjusted relevered beta | 0.4 | 0.5 |
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 83.HK:
cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.