925.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Properties (Holdings) Ltd (925.HK) is 4.2%.

The Cost of Equity of Beijing Properties (Holdings) Ltd (925.HK) is 10.20%.

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

	Range	Selected
Cost of equity	5.10% - 15.30%	10.20%
Tax rate	23.70% - 48.70%	36.20%
Cost of debt	5.70% - 7.00%	6.35%
WACC	4.4% - 4.0%	4.2%

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	0.37	1.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	15.30%

Tax rate	23.70%	48.70%
Debt/Equity ratio	29.02	29.02
Cost of debt	5.70%	7.00%

After-tax WACC	4.4%	4.0%


Selected WACC	4.2%

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 (10.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.