1593.HK WACC - Weighted Average Cost of Capital

The WACC of Chen Lin Education Group Holdings Ltd (1593.HK) is 5.2%.

The Cost of Equity of Chen Lin Education Group Holdings Ltd (1593.HK) is 6.75%.

The Cost of Debt of Chen Lin Education Group Holdings Ltd (1593.HK) is 4.65%.

	Range	Selected
Cost of equity	5.80% - 7.70%	6.75%
Tax rate	4.50% - 8.50%	6.50%
Cost of debt	4.00% - 5.30%	4.65%
WACC	4.5% - 5.8%	5.2%

WACC

1593.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.48	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	7.70%

Tax rate	4.50%	8.50%
Debt/Equity ratio	2	2
Cost of debt	4.00%	5.30%

After-tax WACC	4.5%	5.8%


Selected WACC	5.2%

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.