189.HK WACC - Weighted Average Cost of Capital

The WACC of Dongyue Group Ltd (189.HK) is 9.4%.

The Cost of Equity of Dongyue Group Ltd (189.HK) is 9.40%.

The Cost of Debt of Dongyue Group Ltd (189.HK) is 9.25%.

	Range	Selected
Cost of equity	8.20% - 10.60%	9.40%
Tax rate	14.90% - 17.80%	16.35%
Cost of debt	4.00% - 14.50%	9.25%
WACC	8.2% - 10.6%	9.4%

WACC

189.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.9	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.60%

Tax rate	14.90%	17.80%
Debt/Equity ratio	0	0
Cost of debt	4.00%	14.50%

After-tax WACC	8.2%	10.6%


Selected WACC	9.4%

189.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 189.HK:

cost_of_equity (9.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.9) + 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.