1301.HK WACC - Weighted Average Cost of Capital

The WACC of D&G Technology Holding Co Ltd (1301.HK) is 10.1%.

The Cost of Equity of D&G Technology Holding Co Ltd (1301.HK) is 10.10%.

The Cost of Debt of D&G Technology Holding Co Ltd (1301.HK) is 15.85%.

	Range	Selected
Cost of equity	9.00% - 11.20%	10.10%
Tax rate	26.20% - 30.30%	28.25%
Cost of debt	7.00% - 24.70%	15.85%
WACC	9.0% - 11.2%	10.1%

WACC

1301.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.20%

Tax rate	26.20%	30.30%
Debt/Equity ratio	0	0
Cost of debt	7.00%	24.70%

After-tax WACC	9.0%	11.2%


Selected WACC	10.1%

1301.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 1301.HK:

cost_of_equity (10.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * 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.