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 13.65%.

The Cost of Debt of Beijing Properties (Holdings) Ltd (925.HK) is 6.25%.

	Range	Selected
Cost of equity	8.20% - 19.10%	13.65%
Tax rate	23.70% - 48.70%	36.20%
Cost of debt	5.50% - 7.00%	6.25%
WACC	4.3% - 4.1%	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	0.89	2.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	19.10%

Tax rate	23.70%	48.70%
Debt/Equity ratio	29.02	29.02
Cost of debt	5.50%	7.00%

After-tax WACC	4.3%	4.1%


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 (13.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.