2001.HK WACC - Weighted Average Cost of Capital

The WACC of China New Higher Education Group Ltd (2001.HK) is 8.1%.

The Cost of Equity of China New Higher Education Group Ltd (2001.HK) is 16.40%.

The Cost of Debt of China New Higher Education Group Ltd (2001.HK) is 5.05%.

	Range	Selected
Cost of equity	12.10% - 20.70%	16.40%
Tax rate	14.50% - 16.20%	15.35%
Cost of debt	4.00% - 6.10%	5.05%
WACC	6.1% - 10.0%	8.1%

WACC

2001.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.54	2.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	20.70%

Tax rate	14.50%	16.20%
Debt/Equity ratio	2.19	2.19
Cost of debt	4.00%	6.10%

After-tax WACC	6.1%	10.0%


Selected WACC	8.1%

2001.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 2001.HK:

cost_of_equity (16.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.54) + 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.