593.HK WACC - Weighted Average Cost of Capital

The WACC of DreamEast Group Ltd (593.HK) is 4.6%.

The Cost of Equity of DreamEast Group Ltd (593.HK) is 7.20%.

The Cost of Debt of DreamEast Group Ltd (593.HK) is 5.55%.

	Range	Selected
Cost of equity	4.10% - 10.30%	7.20%
Tax rate	16.50% - 19.40%	17.95%
Cost of debt	4.10% - 7.00%	5.55%
WACC	3.5% - 5.7%	4.6%

WACC

593.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.21	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.10%	10.30%

Tax rate	16.50%	19.40%
Debt/Equity ratio	56.64	56.64
Cost of debt	4.10%	7.00%

After-tax WACC	3.5%	5.7%


Selected WACC	4.6%

593.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 593.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.21) + 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.