832.HK WACC - Weighted Average Cost of Capital

The WACC of Central China Real Estate Ltd (832.HK) is 5.7%.

The Cost of Equity of Central China Real Estate Ltd (832.HK) is 89.70%.

The Cost of Debt of Central China Real Estate Ltd (832.HK) is 6.25%.

	Range	Selected
Cost of equity	62.50% - 116.90%	89.70%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.60% - 7.90%	6.25%
WACC	4.2% - 7.3%	5.7%

WACC

832.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	9.97	16.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	62.50%	116.90%

Tax rate	22.10%	22.30%
Debt/Equity ratio	97.74	97.74
Cost of debt	4.60%	7.90%

After-tax WACC	4.2%	7.3%


Selected WACC	5.7%

832.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 832.HK:

cost_of_equity (89.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (9.97) + 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.