95.HK WACC - Weighted Average Cost of Capital

The WACC of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 5.5%.

The Cost of Equity of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 7.45%.

The Cost of Debt of LVGEM (China) Real Estate Investment Co Ltd (95.HK) is 7.15%.

	Range	Selected
Cost of equity	6.10% - 8.80%	7.45%
Tax rate	18.30% - 30.20%	24.25%
Cost of debt	7.00% - 7.30%	7.15%
WACC	5.7% - 5.3%	5.5%

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	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.80%

Tax rate	18.30%	30.20%
Debt/Equity ratio	21.79	21.79
Cost of debt	7.00%	7.30%

After-tax WACC	5.7%	5.3%


Selected WACC	5.5%

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 (7.45%) = 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.