1765.HK WACC - Weighted Average Cost of Capital

The WACC of Hope Education Group Co Ltd (1765.HK) is 7.3%.

The Cost of Equity of Hope Education Group Co Ltd (1765.HK) is 25.20%.

The Cost of Debt of Hope Education Group Co Ltd (1765.HK) is 4.55%.

	Range	Selected
Cost of equity	22.60% - 27.80%	25.20%
Tax rate	22.20% - 25.80%	24.00%
Cost of debt	4.30% - 4.80%	4.55%
WACC	6.8% - 7.9%	7.3%

WACC

1765.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	3.3	3.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.60%	27.80%

Tax rate	22.20%	25.80%
Debt/Equity ratio	4.67	4.67
Cost of debt	4.30%	4.80%

After-tax WACC	6.8%	7.9%


Selected WACC	7.3%

1765.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 1765.HK:

cost_of_equity (25.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.3) + 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.