2356.HK WACC - Weighted Average Cost of Capital

The WACC of Dah Sing Banking Group Ltd (2356.HK) is 6.9%.

The Cost of Equity of Dah Sing Banking Group Ltd (2356.HK) is 7.80%.

The Cost of Debt of Dah Sing Banking Group Ltd (2356.HK) is 5.00%.

	Range	Selected
Cost of equity	6.90% - 8.70%	7.80%
Tax rate	15.00% - 16.40%	15.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.2% - 7.6%	6.9%

WACC

2356.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.67	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	8.70%

Tax rate	15.00%	16.40%
Debt/Equity ratio	0.34	0.34
Cost of debt	5.00%	5.00%

After-tax WACC	6.2%	7.6%


Selected WACC	6.9%

2356.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 2356.HK:

cost_of_equity (7.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.67) + 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.