262.HK WACC - Weighted Average Cost of Capital

The WACC of Deson Development International Holdings Ltd (262.HK) is 6.2%.

The Cost of Equity of Deson Development International Holdings Ltd (262.HK) is 7.20%.

The Cost of Debt of Deson Development International Holdings Ltd (262.HK) is 7.15%.

	Range	Selected
Cost of equity	5.20% - 9.20%	7.20%
Tax rate	16.10% - 22.20%	19.15%
Cost of debt	7.00% - 7.30%	7.15%
WACC	5.6% - 6.8%	6.2%

WACC

262.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	9.20%

Tax rate	16.10%	22.20%
Debt/Equity ratio	2.1	2.1
Cost of debt	7.00%	7.30%

After-tax WACC	5.6%	6.8%


Selected WACC	6.2%

262.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 262.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.