1598.HK WACC - Weighted Average Cost of Capital

The WACC of China 21st Century Education Group Ltd (1598.HK) is 11.3%.

The Cost of Equity of China 21st Century Education Group Ltd (1598.HK) is 28.25%.

The Cost of Debt of China 21st Century Education Group Ltd (1598.HK) is 9.40%.

	Range	Selected
Cost of equity	13.60% - 42.90%	28.25%
Tax rate	1.50% - 1.90%	1.70%
Cost of debt	7.40% - 11.40%	9.40%
WACC	8.0% - 14.7%	11.3%

WACC

1598.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.79	5.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	42.90%

Tax rate	1.50%	1.90%
Debt/Equity ratio	8.04	8.04
Cost of debt	7.40%	11.40%

After-tax WACC	8.0%	14.7%


Selected WACC	11.3%

1598.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 1598.HK:

cost_of_equity (28.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.79) + 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.