1752.HK WACC - Weighted Average Cost of Capital

The WACC of Top Education Group Ltd (1752.HK) is 6.9%.

The Cost of Equity of Top Education Group Ltd (1752.HK) is 8.60%.

The Cost of Debt of Top Education Group Ltd (1752.HK) is 5.40%.

	Range	Selected
Cost of equity	6.70% - 10.50%	8.60%
Tax rate	29.60% - 33.50%	31.55%
Cost of debt	4.30% - 6.50%	5.40%
WACC	5.4% - 8.3%	6.9%

WACC

1752.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.50%

Tax rate	29.60%	33.50%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.30%	6.50%

After-tax WACC	5.4%	8.3%


Selected WACC	6.9%

1752.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 1752.HK:

cost_of_equity (8.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.