1890.HK WACC - Weighted Average Cost of Capital
The WACC of China Kepei Education Group Ltd (1890.HK) is 8.8%.
| Range | Selected | |
| Cost of equity | 8.4% - 12.6% | 10.5% |
| Tax rate | 2.7% - 4.5% | 3.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.2% - 10.4% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.93 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 12.6% |
| Tax rate | 2.7% | 4.5% |
| Debt/Equity ratio | 0.36 | 0.36 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.2% | 10.4% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1890.HK | China Kepei Education Group Ltd | 0.36 | 0.85 | 0.63 |
| 000526.SZ | Xiamen Unigroup Xue Co Ltd | 0.2 | 1.33 | 1.11 |
| 003032.SZ | Jiangsu Chuanzhiboke Education Technology Co Ltd | 0.02 | 1.11 | 1.09 |
| 1317.HK | China Maple Leaf Educational Systems Ltd | 3.92 | 1.08 | 0.23 |
| 1769.HK | Scholar Education Group | 0.16 | 0.79 | 0.69 |
| 1797.HK | Koolearn Technology Holding Ltd | 0.01 | 2.05 | 2.04 |
| 2001.HK | China New Higher Education Group Ltd | 2.1 | 0.82 | 0.27 |
| 382.HK | Edvantage Group Holdings Ltd | 1.07 | 0.53 | 0.26 |
| 3978.HK | China Beststudy Education Group | 0.07 | 1.05 | 0.98 |
| 600661.SS | Shanghai Xinnanyang Only Education & Technology Co Ltd | 0.18 | 1.29 | 1.1 |
| Low | High | |
| Unlevered beta | 0.67 | 1.03 |
| Relevered beta | 0.9 | 1.37 |
| Adjusted relevered beta | 0.93 | 1.25 |
1890.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 1890.HK:
cost_of_equity (10.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.93) + 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.