BEKE WACC - Weighted Average Cost of Capital
The WACC of Ke Holdings Inc (BEKE) is 8.0%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.2% | 8.05% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 4.0% - 7.7% | 5.85% |
| WACC | 6.9% - 9.1% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.02 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.2% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.0% | 7.7% |
| After-tax WACC | 6.9% | 9.1% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BEKE | Ke Holdings Inc | 0 | 1.03 | 1.03 |
| AIF.TO | Altus Group Ltd | 0.13 | 1.04 | 0.95 |
| BRE.TO | Bridgemarq Real Estate Services Inc | 0.64 | 0.87 | 0.59 |
| CBRE | CBRE Group Inc | 0.11 | 0.86 | 0.8 |
| CIGI.TO | Colliers International Group Inc | 0.25 | 1.29 | 1.09 |
| FSV.TO | FirstService Corp | 0.16 | 0.79 | 0.71 |
| JLL | Jones Lang LaSalle Inc | 0.18 | 1.04 | 0.92 |
| NMRK | Newmark Group Inc | 0.68 | 1.17 | 0.78 |
| RMAX | Re/Max Holdings Inc | 1.42 | 1.32 | 0.65 |
| LSL.L | LSL Property Services PLC | 0.11 | 0.6 | 0.56 |
| Low | High | |
| Unlevered beta | 0.75 | 0.84 |
| Relevered beta | 1.03 | 1.1 |
| Adjusted relevered beta | 1.02 | 1.07 |
BEKE'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 BEKE:
cost_of_equity (8.05%) = risk_free_rate (2.85%) + equity_risk_premium (4.70%) * adjusted_beta (1.02) + 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.