DXF WACC - Weighted Average Cost of Capital
The WACC of Dunxin Financial Holdings Ltd (DXF) is 4.3%.
| Range | Selected | |
| Cost of equity | 13.0% - 21.0% | 17% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.2% - 4.5% | 4.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.99 | 2.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.0% | 21.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 19.17 | 19.17 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.2% | 4.5% |
| Selected WACC | 4.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DXF | Dunxin Financial Holdings Ltd | 19.17 | 9.75 | 0.65 |
| ACD.TO | Accord Financial Corp | 15.36 | 0.6 | 0.05 |
| BCF.V | Builders Capital Mortgage Corp | 0.17 | 0.27 | 0.24 |
| BLX | Foreign Trade Bank of Latin America Inc | 3.05 | 0.75 | 0.23 |
| GWGH | GWG Holdings Inc | 29.86 | 0.05 | 0 |
| IOU.V | Iou Financial Inc | 0.25 | 0.64 | 0.54 |
| MLC.NE | Mount Logan Capital Inc | 2 | 0.68 | 0.28 |
| RNP.V | Royalty North Partners Ltd | 0.16 | 1.8 | 1.61 |
| SFI.V | Solution Financial Inc | 0.34 | 0.94 | 0.75 |
| SWKH | SWK Holdings Corp | 0.23 | 0.07 | 0.06 |
| ORCH.L | Orchard Funding Group PLC | 5.09 | -1.52 | -0.32 |
| Low | High | |
| Unlevered beta | 0.23 | 0.28 |
| Relevered beta | 2.48 | 3.81 |
| Adjusted relevered beta | 1.99 | 2.88 |
DXF'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 DXF:
cost_of_equity (17.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.99) + 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.