95.HK WACC - Weighted Average Cost of Capital

The WACC of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 8.5%.

The Cost of Equity of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 7.30%.

The Cost of Debt of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 15.20%.

	Range	Selected
Cost of equity	6.10% - 8.50%	7.30%
Tax rate	35.30% - 46.50%	40.90%
Cost of debt	7.50% - 22.90%	15.20%
WACC	4.9% - 12.1%	8.5%

WACC

95.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.50%

Tax rate	35.30%	46.50%
Debt/Equity ratio	25.12	25.12
Cost of debt	7.50%	22.90%

After-tax WACC	4.9%	12.1%


Selected WACC	8.5%

95.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 95.HK:

cost_of_equity (7.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.