6889.HK WACC - Weighted Average Cost of Capital

The WACC of Dynam Japan Holdings Co Ltd (6889.HK) is 5.0%.

The Cost of Equity of Dynam Japan Holdings Co Ltd (6889.HK) is 13.85%.

The Cost of Debt of Dynam Japan Holdings Co Ltd (6889.HK) is 5.25%.

	Range	Selected
Cost of equity	9.30% - 18.40%	13.85%
Tax rate	40.00% - 43.20%	41.60%
Cost of debt	4.00% - 6.50%	5.25%
WACC	3.6% - 6.3%	5.0%

WACC

6889.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.08	2.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	18.40%

Tax rate	40.00%	43.20%
Debt/Equity ratio	4.59	4.59
Cost of debt	4.00%	6.50%

After-tax WACC	3.6%	6.3%


Selected WACC	5.0%

6889.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 6889.HK:

cost_of_equity (13.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.08) + 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.