2779.HK
China Xinhua Education Group Ltd
Price:  
0.57 
HKD
Volume:  
405,000.00
China | Diversified Consumer Services
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2779.HK WACC - Weighted Average Cost of Capital

The WACC of China Xinhua Education Group Ltd (2779.HK) is 7.3%.

The Cost of Equity of China Xinhua Education Group Ltd (2779.HK) is 9.45%.
The Cost of Debt of China Xinhua Education Group Ltd (2779.HK) is 4.25%.

Range Selected
Cost of equity 7.10% - 11.80% 9.45%
Tax rate 1.30% - 1.70% 1.50%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.8% - 8.8% 7.3%
WACC

2779.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.71 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 11.80%
Tax rate 1.30% 1.70%
Debt/Equity ratio 0.69 0.69
Cost of debt 4.00% 4.50%
After-tax WACC 5.8% 8.8%
Selected WACC 7.3%

2779.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 2779.HK:

cost_of_equity (9.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.71) + 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.