DOYU
Douyu International Holdings Ltd
Price:  
7.74 
USD
Volume:  
47,512.00
China | Entertainment
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DOYU WACC - Weighted Average Cost of Capital

The WACC of Douyu International Holdings Ltd (DOYU) is 5.5%.

The Cost of Equity of Douyu International Holdings Ltd (DOYU) is 7.30%.
The Cost of Debt of Douyu International Holdings Ltd (DOYU) is 5.00%.

Range Selected
Cost of equity 5.90% - 8.70% 7.30%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.8% - 6.2% 5.5%
WACC

DOYU WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.45 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 8.70%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 4.8% 6.2%
Selected WACC 5.5%

DOYU'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 DOYU:

cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.