UDCD.QA WACC - Weighted Average Cost of Capital
The WACC of United Development Company QPSC (UDCD.QA) is 9.8%.
| Range | Selected | |
| Cost of equity | 13.8% - 19.2% | 16.5% |
| Tax rate | 1.4% - 2.1% | 1.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.7% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 5.0% | 5.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.47 | 1.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.8% | 19.2% |
| Tax rate | 1.4% | 2.1% |
| Debt/Equity ratio | 1.35 | 1.35 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.7% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UDCD.QA | United Development Company QPSC | 1.35 | 1.21 | 0.52 |
| 000029.SZ | ShenZhen Special Economic Zone Real Estate & Properties Group Co Ltd | 0.03 | 1.71 | 1.66 |
| 000631.SZ | Shunfa Hengye Corp | 0 | 1.27 | 1.27 |
| 600158.SS | China Sports Industry Group Co Ltd | 0.05 | 1.11 | 1.06 |
| 600604.SS | Shanghai Shibei Hi-Tech Co Ltd | 1.31 | 1.14 | 0.5 |
| 600641.SS | Shanghai Wanye Enterprises Co Ltd | 0.03 | 1.68 | 1.63 |
| BSDE.JK | Bumi Serpong Damai Tbk PT | 0.79 | 0.99 | 0.56 |
| NLCS.QA | Alijarah Holding Co QPSC | 0.27 | 1.2 | 0.95 |
| W05.SI | Wing Tai Holdings Ltd | 0.85 | 0.65 | 0.36 |
| WHA.BK | WHA Corporation PCL | 1 | 1.68 | 0.85 |
| Low | High | |
| Unlevered beta | 0.73 | 0.99 |
| Relevered beta | 1.7 | 2.31 |
| Adjusted relevered beta | 1.47 | 1.88 |
UDCD.QA'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 UDCD.QA:
cost_of_equity (16.50%) = risk_free_rate (5.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.47) + 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.