695.HK WACC - Weighted Average Cost of Capital

The WACC of Dongwu Cement International Ltd (695.HK) is 7.0%.

The Cost of Equity of Dongwu Cement International Ltd (695.HK) is 7.60%.

The Cost of Debt of Dongwu Cement International Ltd (695.HK) is 5.80%.

	Range	Selected
Cost of equity	6.20% - 9.00%	7.60%
Tax rate	12.30% - 24.80%	18.55%
Cost of debt	4.60% - 7.00%	5.80%
WACC	5.8% - 8.2%	7.0%

WACC

695.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.57	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.00%

Tax rate	12.30%	24.80%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.60%	7.00%

After-tax WACC	5.8%	8.2%


Selected WACC	7.0%

695.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 695.HK:

cost_of_equity (7.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.