989.HK WACC - Weighted Average Cost of Capital

The WACC of Ground International Development Ltd (989.HK) is 5.4%.

The Cost of Equity of Ground International Development Ltd (989.HK) is 8.55%.

The Cost of Debt of Ground International Development Ltd (989.HK) is 6.30%.

	Range	Selected
Cost of equity	6.10% - 11.00%	8.55%
Tax rate	14.20% - 17.40%	15.80%
Cost of debt	5.60% - 7.00%	6.30%
WACC	4.9% - 6.0%	5.4%

WACC

989.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.53	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	11.00%

Tax rate	14.20%	17.40%
Debt/Equity ratio	18.86	18.86
Cost of debt	5.60%	7.00%

After-tax WACC	4.9%	6.0%


Selected WACC	5.4%

989.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 989.HK:

cost_of_equity (8.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.