DGNG WACC - Weighted Average Cost of Capital
The WACC of Diguang International Development Co Ltd (DGNG) is 9.6%.
| Range | Selected | |
| Cost of equity | 72.1% - 338.2% | 205.15% |
| Tax rate | 2.7% - 4.0% | 3.35% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.7% - 11.4% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 14.83 | 59.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 72.1% | 338.2% |
| Tax rate | 2.7% | 4.0% |
| Debt/Equity ratio | 69.25 | 69.25 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.7% | 11.4% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DGNG | Diguang International Development Co Ltd | 69.25 | 37.6 | 0.56 |
| APH | Amphenol Corp | 0.07 | 1.71 | 1.61 |
| CVAT | Cavitation Technologies Inc | 0.02 | -0.36 | -0.35 |
| DYSL | Dynasil Corporation of America | 0.21 | 0.01 | 0.01 |
| INRD | Inrad Optics Inc | 0.15 | -0.59 | -0.52 |
| KN | Knowles Corp | 0.14 | 1.65 | 1.45 |
| LFUS | Littelfuse Inc | 0.17 | 1.75 | 1.51 |
| MPAD | Micropac Industries Inc | 0.31 | 0.68 | 0.53 |
| VSH | Vishay Intertechnology Inc | 0.48 | 1.77 | 1.21 |
| YNV.V | Ynvisible Interactive Inc | 0.01 | 1.66 | 1.64 |
| ZTE.CN | Ztest Electronics Inc | 0.05 | -0.2 | -0.19 |
| Low | High | |
| Unlevered beta | 0.53 | 1.21 |
| Relevered beta | 21.64 | 88.36 |
| Adjusted relevered beta | 14.83 | 59.53 |
DGNG'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 DGNG:
cost_of_equity (205.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (14.83) + 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.