925.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Properties (Holdings) Ltd (925.HK) is 4.3%.

The Cost of Equity of Beijing Properties (Holdings) Ltd (925.HK) is 14.75%.

The Cost of Debt of Beijing Properties (Holdings) Ltd (925.HK) is 6.35%.

	Range	Selected
Cost of equity	8.90% - 20.60%	14.75%
Tax rate	23.70% - 48.70%	36.20%
Cost of debt	5.70% - 7.00%	6.35%
WACC	4.5% - 4.2%	4.3%

WACC

925.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	2.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	20.60%

Tax rate	23.70%	48.70%
Debt/Equity ratio	28.31	28.31
Cost of debt	5.70%	7.00%

After-tax WACC	4.5%	4.2%


Selected WACC	4.3%

925.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 925.HK:

cost_of_equity (14.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.