889.HK WACC - Weighted Average Cost of Capital

The WACC of Datronix Holdings Ltd (889.HK) is 5.5%.

The Cost of Equity of Datronix Holdings Ltd (889.HK) is 5.55%.

The Cost of Debt of Datronix Holdings Ltd (889.HK) is 5.00%.

	Range	Selected
Cost of equity	4.80% - 6.30%	5.55%
Tax rate	1.90% - 19.20%	10.55%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.8% - 6.3%	5.5%

WACC

889.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.30%

Tax rate	1.90%	19.20%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.00%	5.00%

After-tax WACC	4.8%	6.3%


Selected WACC	5.5%

889.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 889.HK:

cost_of_equity (5.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.