3999.HK WACC - Weighted Average Cost of Capital

The WACC of Dachan Food (Asia) Ltd (3999.HK) is 8.6%.

The Cost of Equity of Dachan Food (Asia) Ltd (3999.HK) is 13.40%.

The Cost of Debt of Dachan Food (Asia) Ltd (3999.HK) is 4.25%.

	Range	Selected
Cost of equity	10.50% - 16.30%	13.40%
Tax rate	10.90% - 11.50%	11.20%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.1% - 10.2%	8.6%

WACC

3999.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.27	1.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	16.30%

Tax rate	10.90%	11.50%
Debt/Equity ratio	0.98	0.98
Cost of debt	4.00%	4.50%

After-tax WACC	7.1%	10.2%


Selected WACC	8.6%

3999.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 3999.HK:

cost_of_equity (13.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.27) + 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.