620.HK WACC - Weighted Average Cost of Capital

The WACC of DTXS Silk Road Investment Holdings Co Ltd (620.HK) is 6.4%.

The Cost of Equity of DTXS Silk Road Investment Holdings Co Ltd (620.HK) is 18.70%.

The Cost of Debt of DTXS Silk Road Investment Holdings Co Ltd (620.HK) is 5.75%.

	Range	Selected
Cost of equity	13.20% - 24.20%	18.70%
Tax rate	11.90% - 15.50%	13.70%
Cost of debt	4.50% - 7.00%	5.75%
WACC	4.9% - 7.9%	6.4%

WACC

620.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.73	2.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	24.20%

Tax rate	11.90%	15.50%
Debt/Equity ratio	8.18	8.18
Cost of debt	4.50%	7.00%

After-tax WACC	4.9%	7.9%


Selected WACC	6.4%

620.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 620.HK:

cost_of_equity (18.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.73) + 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.