1765.HK WACC - Weighted Average Cost of Capital

The WACC of Hope Education Group Co Ltd (1765.HK) is 7.6%.

The Cost of Equity of Hope Education Group Co Ltd (1765.HK) is 23.55%.

The Cost of Debt of Hope Education Group Co Ltd (1765.HK) is 4.45%.

	Range	Selected
Cost of equity	19.90% - 27.20%	23.55%
Tax rate	22.20% - 25.80%	24.00%
Cost of debt	4.10% - 4.80%	4.45%
WACC	6.7% - 8.5%	7.6%

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	2.85	3.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.90%	27.20%

Tax rate	22.20%	25.80%
Debt/Equity ratio	3.78	3.78
Cost of debt	4.10%	4.80%

After-tax WACC	6.7%	8.5%


Selected WACC	7.6%

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 (23.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.85) + 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.