2348.HK WACC - Weighted Average Cost of Capital

The WACC of Dawnrays Pharmaceutical (Holdings) Ltd (2348.HK) is 8.2%.

The Cost of Equity of Dawnrays Pharmaceutical (Holdings) Ltd (2348.HK) is 8.00%.

The Cost of Debt of Dawnrays Pharmaceutical (Holdings) Ltd (2348.HK) is 22.35%.

	Range	Selected
Cost of equity	6.10% - 9.90%	8.00%
Tax rate	19.20% - 19.70%	19.45%
Cost of debt	4.00% - 40.70%	22.35%
WACC	6.1% - 10.3%	8.2%

WACC

2348.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.90%

Tax rate	19.20%	19.70%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	40.70%

After-tax WACC	6.1%	10.3%


Selected WACC	8.2%

2348.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 2348.HK:

cost_of_equity (8.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.