DGH.AX
Desane Group Holdings Ltd
Price:  
0.87 
AUD
Volume:  
29,473
Australia | Real Estate Management & Development

DGH.AX WACC - Weighted Average Cost of Capital

The WACC of Desane Group Holdings Ltd (DGH.AX) is 5.8%.

The Cost of Equity of Desane Group Holdings Ltd (DGH.AX) is 6.55%.
The Cost of Debt of Desane Group Holdings Ltd (DGH.AX) is 5.5%.

RangeSelected
Cost of equity5.8% - 7.3%6.55%
Tax rate29.9% - 30.1%30%
Cost of debt4.0% - 7.0%5.5%
WACC5.0% - 6.6%5.8%
WACC

DGH.AX WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.1%6.1%
Adjusted beta0.360.37
Additional risk adjustments0.0%0.5%
Cost of equity5.8%7.3%
Tax rate29.9%30.1%
Debt/Equity ratio
0.410.41
Cost of debt4.0%7.0%
After-tax WACC5.0%6.6%
Selected WACC5.8%

DGH.AX'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 DGH.AX:

cost_of_equity (6.55%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.