1969.HK WACC - Weighted Average Cost of Capital
The WACC of China Chunlai Education Group Co Ltd (1969.HK) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.4% - 9.8% | 7.6% |
| Tax rate | 0.6% - 0.8% | 0.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.0% - 8.1% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.43 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 9.8% |
| Tax rate | 0.6% | 0.8% |
| Debt/Equity ratio | 0.48 | 0.48 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.0% | 8.1% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1969.HK | China Chunlai Education Group Co Ltd | 0.48 | 0.22 | 0.15 |
| 000526.SZ | Xiamen Unigroup Xue Co Ltd | 0.19 | 1.34 | 1.13 |
| 003032.SZ | Jiangsu Chuanzhiboke Education Technology Co Ltd | 0.02 | 1.11 | 1.08 |
| 1525.HK | Shanghai Gench Education Group Ltd | 0.94 | 0.22 | 0.11 |
| 1593.HK | Chen Lin Education Group Holdings Ltd | 2.02 | 0.03 | 0.01 |
| 1598.HK | China 21st Century Education Group Ltd | 8 | 0.7 | 0.08 |
| 1756.HK | Huali University Group Ltd | 3.43 | 0.28 | 0.06 |
| 1758.HK | Bojun Education Company Ltd | 11.25 | -0.34 | -0.03 |
| 1797.HK | Koolearn Technology Holding Ltd | 0.01 | 2.04 | 2.02 |
| 600661.SS | Shanghai Xinnanyang Only Education & Technology Co Ltd | 0.12 | 1.31 | 1.17 |
| Low | High | |
| Unlevered beta | 0.1 | 0.52 |
| Relevered beta | 0.15 | 0.78 |
| Adjusted relevered beta | 0.43 | 0.85 |
1969.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 1969.HK:
cost_of_equity (7.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.