The WACC of Fang Holdings Ltd (SFUN) is 5.3%.
Range | Selected | |
Cost of equity | 59.8% - 80.4% | 70.1% |
Tax rate | 24.2% - 33.6% | 28.9% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.9% - 5.6% | 5.3% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 13.35 | 14.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 59.8% | 80.4% |
Tax rate | 24.2% | 33.6% |
Debt/Equity ratio | 28.89 | 28.89 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.9% | 5.6% |
Selected WACC | 5.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SFUN | Fang Holdings Ltd | 28.89 | 1.01 | 0.05 |
1357.HK | Meitu Inc | 0.01 | 1.87 | 1.86 |
300785.SZ | Beijing Zhidemai Technology Co Ltd | 0.03 | 2.09 | 2.05 |
700.HK | Tencent Holdings Ltd | 0.08 | 1.2 | 1.13 |
LOV | Spark Networks SE | 20.48 | 0.45 | 0.03 |
MDF.TO | mdf Commerce Inc | 0.04 | 0.31 | 0.3 |
MOMO | Momo Inc | 0.44 | 0.53 | 0.41 |
MRNJ | Metatron Inc | 22.7 | -265.09 | -15.44 |
QTT | Qutoutiao Inc | 4.22 | 3.55 | 0.89 |
YNDX | Yandex NV | 0.28 | 1.61 | 1.34 |
Low | High | |
Unlevered beta | 0.36 | 0.98 |
Relevered beta | 19.43 | 21.22 |
Adjusted relevered beta | 13.35 | 14.55 |
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 SFUN:
cost_of_equity (70.10%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (13.35) + 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.