1765.HK WACC - Weighted Average Cost of Capital
The WACC of Hope Education Group Co Ltd (1765.HK) is 7.3%.
| Range | Selected | |
| Cost of equity | 17.9% - 23.4% | 20.65% |
| Tax rate | 22.2% - 25.8% | 24% |
| Cost of debt | 4.1% - 4.8% | 4.45% |
| WACC | 6.5% - 8.1% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 2.51 | 2.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.9% | 23.4% |
| Tax rate | 22.2% | 25.8% |
| Debt/Equity ratio | 3.39 | 3.39 |
| Cost of debt | 4.1% | 4.8% |
| After-tax WACC | 6.5% | 8.1% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1765.HK | Hope Education Group Co Ltd | 3.39 | 1.14 | 0.32 |
| 000526.SZ | Xiamen Unigroup Xue Co Ltd | 0.2 | 1.33 | 1.15 |
| 003032.SZ | Jiangsu Chuanzhiboke Education Technology Co Ltd | 0.02 | 1.11 | 1.09 |
| 1773.HK | Tianli Education International Holdings Ltd | 0.35 | 1.2 | 0.94 |
| 1797.HK | Koolearn Technology Holding Ltd | 0.01 | 2.05 | 2.04 |
| 1890.HK | China Kepei Education Group Ltd | 0.36 | 0.85 | 0.67 |
| 3978.HK | China Beststudy Education Group | 0.07 | 1.05 | 1 |
| 600661.SS | Shanghai Xinnanyang Only Education & Technology Co Ltd | 0.18 | 1.29 | 1.13 |
| 6169.HK | China Yuhua Education Corp Ltd | 0.69 | 0.78 | 0.51 |
| 667.HK | China East Education Holdings Ltd | 0.12 | 0.96 | 0.88 |
| Low | High | |
| Unlevered beta | 0.92 | 1.04 |
| Relevered beta | 3.25 | 3.69 |
| Adjusted relevered beta | 2.51 | 2.8 |
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 (20.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.51) + 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.