864.HK WACC - Weighted Average Cost of Capital

The WACC of Wing Lee Property Investments Ltd (864.HK) is 5.7%.

The Cost of Equity of Wing Lee Property Investments Ltd (864.HK) is 8.60%.

The Cost of Debt of Wing Lee Property Investments Ltd (864.HK) is 4.55%.

	Range	Selected
Cost of equity	6.90% - 10.30%	8.60%
Tax rate	3.70% - 5.90%	4.80%
Cost of debt	4.00% - 5.10%	4.55%
WACC	4.9% - 6.6%	5.7%

WACC

864.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.67	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.30%

Tax rate	3.70%	5.90%
Debt/Equity ratio	2.01	2.01
Cost of debt	4.00%	5.10%

After-tax WACC	4.9%	6.6%


Selected WACC	5.7%

864.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 864.HK:

cost_of_equity (8.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.67) + 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.