1593.HK WACC - Weighted Average Cost of Capital
The WACC of Chen Lin Education Group Holdings Ltd (1593.HK) is 8.4%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.8% | 6.75% |
| Tax rate | 4.5% - 8.5% | 6.5% |
| Cost of debt | 5.3% - 14.6% | 9.95% |
| WACC | 5.3% - 11.6% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.48 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.8% |
| Tax rate | 4.5% | 8.5% |
| Debt/Equity ratio | 2.02 | 2.02 |
| Cost of debt | 5.3% | 14.6% |
| After-tax WACC | 5.3% | 11.6% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1593.HK | Chen Lin Education Group Holdings Ltd | 2.02 | 0.03 | 0.01 |
| 1449.HK | Leader Education Ltd | 8.02 | 0.6 | 0.07 |
| 1525.HK | Shanghai Gench Education Group Ltd | 0.94 | 0.22 | 0.12 |
| 1598.HK | China 21st Century Education Group Ltd | 8 | 0.7 | 0.08 |
| 1756.HK | Huali University Group Ltd | 3.43 | 0.28 | 0.07 |
| 1758.HK | Bojun Education Company Ltd | 11.25 | -0.34 | -0.03 |
| 1851.HK | China Gingko Education Group Company Ltd | 0.67 | 0.21 | 0.13 |
| 1969.HK | China Chunlai Education Group Co Ltd | 0.48 | 0.22 | 0.15 |
| 2779.HK | China Xinhua Education Group Ltd | 0.71 | 0.8 | 0.48 |
| 600455.SS | ButOne Information Corporation XiAn | 0.29 | 0.98 | 0.77 |
| Low | High | |
| Unlevered beta | 0.08 | 0.12 |
| Relevered beta | 0.22 | 0.36 |
| Adjusted relevered beta | 0.48 | 0.57 |
1593.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 1593.HK:
cost_of_equity (6.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.