1565.HK WACC - Weighted Average Cost of Capital

The WACC of Virscend Education Company Ltd (1565.HK) is 7.8%.

The Cost of Equity of Virscend Education Company Ltd (1565.HK) is 8.35%.

The Cost of Debt of Virscend Education Company Ltd (1565.HK) is 8.70%.

	Range	Selected
Cost of equity	6.00% - 10.70%	8.35%
Tax rate	11.00% - 12.20%	11.60%
Cost of debt	6.00% - 11.40%	8.70%
WACC	5.5% - 10.2%	7.8%

WACC

1565.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.52	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	10.70%

Tax rate	11.00%	12.20%
Debt/Equity ratio	3.24	3.24
Cost of debt	6.00%	11.40%

After-tax WACC	5.5%	10.2%


Selected WACC	7.8%

1565.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 1565.HK:

cost_of_equity (8.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.