2019.HK WACC - Weighted Average Cost of Capital

The WACC of Dexin China Holdings Company Ltd (2019.HK) is 4.7%.

The Cost of Equity of Dexin China Holdings Company Ltd (2019.HK) is 11.35%.

The Cost of Debt of Dexin China Holdings Company Ltd (2019.HK) is 7.25%.

	Range	Selected
Cost of equity	7.50% - 15.20%	11.35%
Tax rate	31.40% - 40.30%	35.85%
Cost of debt	7.00% - 7.50%	7.25%
WACC	4.8% - 4.6%	4.7%

WACC

2019.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.77	1.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	15.20%

Tax rate	31.40%	40.30%
Debt/Equity ratio	113.41	113.41
Cost of debt	7.00%	7.50%

After-tax WACC	4.8%	4.6%


Selected WACC	4.7%

2019.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 2019.HK:

cost_of_equity (11.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.