1317.HK WACC - Weighted Average Cost of Capital

The WACC of China Maple Leaf Educational Systems Ltd (1317.HK) is 7.2%.

The Cost of Equity of China Maple Leaf Educational Systems Ltd (1317.HK) is 14.00%.

The Cost of Debt of China Maple Leaf Educational Systems Ltd (1317.HK) is 7.20%.

	Range	Selected
Cost of equity	10.90% - 17.10%	14.00%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.10% - 10.30%	7.20%
WACC	4.7% - 9.8%	7.2%

WACC

1317.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.34	1.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	17.10%

Tax rate	22.10%	22.30%
Debt/Equity ratio	4.06	4.06
Cost of debt	4.10%	10.30%

After-tax WACC	4.7%	9.8%


Selected WACC	7.2%

1317.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 1317.HK:

cost_of_equity (14.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.34) + 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.