1126.HK
Dream International Ltd
Price:  
5.70 
HKD
Volume:  
256,000.00
Hong Kong | Leisure Products
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1126.HK WACC - Weighted Average Cost of Capital

The WACC of Dream International Ltd (1126.HK) is 7.4%.

The Cost of Equity of Dream International Ltd (1126.HK) is 7.55%.
The Cost of Debt of Dream International Ltd (1126.HK) is 4.25%.

Range Selected
Cost of equity 5.50% - 9.60% 7.55%
Tax rate 18.90% - 19.90% 19.40%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.4% - 9.4% 7.4%
WACC

1126.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.44 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 9.60%
Tax rate 18.90% 19.90%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.00% 4.50%
After-tax WACC 5.4% 9.4%
Selected WACC 7.4%

1126.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 1126.HK:

cost_of_equity (7.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.