845.HK WACC - Weighted Average Cost of Capital

The WACC of Glorious Property Holdings Ltd (845.HK) is 4.2%.

The Cost of Equity of Glorious Property Holdings Ltd (845.HK) is 151.40%.

The Cost of Debt of Glorious Property Holdings Ltd (845.HK) is 4.85%.

	Range	Selected
Cost of equity	106.50% - 196.30%	151.40%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.10% - 5.60%	4.85%
WACC	3.5% - 5.0%	4.2%

WACC

845.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	17.33	27.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	106.50%	196.30%

Tax rate	22.10%	22.30%
Debt/Equity ratio	315.08	315.08
Cost of debt	4.10%	5.60%

After-tax WACC	3.5%	5.0%


Selected WACC	4.2%

845.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 845.HK:

cost_of_equity (151.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (17.33) + 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.