1712.HK WACC - Weighted Average Cost of Capital

The WACC of Dragon Mining Ltd (1712.HK) is 9.8%.

The Cost of Equity of Dragon Mining Ltd (1712.HK) is 9.80%.

The Cost of Debt of Dragon Mining Ltd (1712.HK) is 5.50%.

	Range	Selected
Cost of equity	7.20% - 12.40%	9.80%
Tax rate	28.40% - 37.60%	33.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.2% - 12.3%	9.8%

WACC

1712.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.73	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	12.40%

Tax rate	28.40%	37.60%
Debt/Equity ratio	0	0
Cost of debt	4.00%	7.00%

After-tax WACC	7.2%	12.3%


Selected WACC	9.8%

1712.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 1712.HK:

cost_of_equity (9.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.73) + 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.