9978.HK WACC - Weighted Average Cost of Capital

The WACC of Fineland Real Estate Services Group Ltd (9978.HK) is 7.1%.

The Cost of Equity of Fineland Real Estate Services Group Ltd (9978.HK) is 7.15%.

The Cost of Debt of Fineland Real Estate Services Group Ltd (9978.HK) is 8.55%.

	Range	Selected
Cost of equity	5.30% - 9.00%	7.15%
Tax rate	9.30% - 12.90%	11.10%
Cost of debt	7.00% - 10.10%	8.55%
WACC	5.3% - 8.9%	7.1%

WACC

9978.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.66

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.30%	9.00%

Tax rate	9.30%	12.90%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.00%	10.10%

After-tax WACC	5.3%	8.9%


Selected WACC	7.1%

9978.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 9978.HK:

cost_of_equity (7.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.