2371.HK WACC - Weighted Average Cost of Capital
The WACC of China Chuanglian Education Financial Group Ltd (2371.HK) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.9% - 6.7% | 5.8% |
| Tax rate | 19.0% - 37.5% | 28.25% |
| Cost of debt | 6.3% - 7.0% | 6.65% |
| WACC | 5.0% - 5.8% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.26 | 0.33 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 4.9% | 6.7% |
| Tax rate | 19.0% | 37.5% |
| Debt/Equity ratio | 0.67 | 0.67 |
| Cost of debt | 6.3% | 7.0% |
| After-tax WACC | 5.0% | 5.8% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2371.HK | China Chuanglian Education Financial Group Ltd | 0.67 | 0.42 | 0.29 |
| 1082.HK | Hong Kong Education Intl Investments Ltd | 0.03 | -0.07 | -0.07 |
| 1775.HK | Bexcellent Group Holdings Ltd | 1.08 | -0.13 | -0.07 |
| 32.HK | Cross-Harbour Holdings Ltd | 0.1 | 0.02 | 0.01 |
| 8055.HK | China E-Information Technology Group Ltd | 0.02 | 0.99 | 0.98 |
| 8160.HK | Goldway Education Group Ltd | 0.32 | -0.86 | -0.7 |
| 8363.HK | Sdm Group Holdings Ltd | 7.01 | -0.01 | 0 |
| AKG.AX | Academies Australasia Group Ltd | 2.79 | 0.23 | 0.08 |
| ICT.AX | iCollege Ltd | 0.16 | -0.28 | -0.25 |
| MINDA.KL | Minda Global Bhd | 0.85 | -0.25 | -0.16 |
| Low | High | |
| Unlevered beta | -0.07 | 0 |
| Relevered beta | -0.1 | 0 |
| Adjusted relevered beta | 0.26 | 0.33 |
2371.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 2371.HK:
cost_of_equity (5.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.26) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.