1773.HK WACC - Weighted Average Cost of Capital
The WACC of Tianli Education International Holdings Ltd (1773.HK) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.6% | 7.75% |
| Tax rate | 19.0% - 23.8% | 21.4% |
| Cost of debt | 4.0% - 5.1% | 4.55% |
| WACC | 5.2% - 8.1% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.51 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.6% |
| Tax rate | 19.0% | 23.8% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 4.0% | 5.1% |
| After-tax WACC | 5.2% | 8.1% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1773.HK | Tianli Education International Holdings Ltd | 0.34 | 1.19 | 0.94 |
| 003032.SZ | Jiangsu Chuanzhiboke Education Technology Co Ltd | 0.02 | 1.11 | 1.09 |
| 1449.HK | Leader Education Ltd | 8.02 | 0.6 | 0.08 |
| 1593.HK | Chen Lin Education Group Holdings Ltd | 2.02 | 0.03 | 0.01 |
| 1756.HK | Huali University Group Ltd | 3.43 | 0.28 | 0.08 |
| 1758.HK | Bojun Education Company Ltd | 11.25 | -0.34 | -0.04 |
| 1765.HK | Hope Education Group Co Ltd | 4.25 | 1.24 | 0.29 |
| 1797.HK | Koolearn Technology Holding Ltd | 0.01 | 2.04 | 2.03 |
| 1890.HK | China Kepei Education Group Ltd | 0.36 | 0.91 | 0.72 |
| 6169.HK | China Yuhua Education Corp Ltd | 0.79 | 0.79 | 0.49 |
| Low | High | |
| Unlevered beta | 0.21 | 0.58 |
| Relevered beta | 0.27 | 0.73 |
| Adjusted relevered beta | 0.51 | 0.82 |
1773.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 1773.HK:
cost_of_equity (7.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.51) + 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.