1569.HK WACC - Weighted Average Cost of Capital

The WACC of Minsheng Education Group Company Ltd (1569.HK) is 12.2%.

The Cost of Equity of Minsheng Education Group Company Ltd (1569.HK) is 12.20%.

The Cost of Debt of Minsheng Education Group Company Ltd (1569.HK) is 16.05%.

	Range	Selected
Cost of equity	10.50% - 13.90%	12.20%
Tax rate	10.30% - 31.90%	21.10%
Cost of debt	12.20% - 19.90%	16.05%
WACC	10.9% - 13.6%	12.2%

WACC

1569.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.27	1.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.90%

Tax rate	10.30%	31.90%
Debt/Equity ratio	3.8	3.8
Cost of debt	12.20%	19.90%

After-tax WACC	10.9%	13.6%


Selected WACC	12.2%

1569.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 1569.HK:

cost_of_equity (12.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.27) + 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.