726.HK WACC - Weighted Average Cost of Capital

The WACC of DIT Group Ltd (726.HK) is 5.7%.

The Cost of Equity of DIT Group Ltd (726.HK) is 7.25%.

The Cost of Debt of DIT Group Ltd (726.HK) is 6.30%.

	Range	Selected
Cost of equity	6.20% - 8.30%	7.25%
Tax rate	9.60% - 14.20%	11.90%
Cost of debt	5.60% - 7.00%	6.30%
WACC	5.2% - 6.2%	5.7%

WACC

726.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.30%

Tax rate	9.60%	14.20%
Debt/Equity ratio	9.31	9.31
Cost of debt	5.60%	7.00%

After-tax WACC	5.2%	6.2%


Selected WACC	5.7%

726.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 726.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.