726.HK WACC - Weighted Average Cost of Capital

The WACC of DIT Group Ltd (726.HK) is 5.1%.

The Cost of Equity of DIT Group Ltd (726.HK) is 6.40%.

The Cost of Debt of DIT Group Ltd (726.HK) is 5.60%.

	Range	Selected
Cost of equity	5.40% - 7.40%	6.40%
Tax rate	9.60% - 14.20%	11.90%
Cost of debt	4.20% - 7.00%	5.60%
WACC	4.0% - 6.2%	5.1%

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	0.43	0.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.40%

Tax rate	9.60%	14.20%
Debt/Equity ratio	7.74	7.74
Cost of debt	4.20%	7.00%

After-tax WACC	4.0%	6.2%


Selected WACC	5.1%

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 (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.