600661.SS WACC - Weighted Average Cost of Capital
The WACC of Shanghai Xinnanyang Only Education & Technology Co Ltd (600661.SS) is 6.0%.
| Range | Selected | |
| Cost of equity | 5.0% - 7.4% | 6.2% |
| Tax rate | 7.4% - 22.3% | 14.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 7.1% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.39 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 7.4% |
| Tax rate | 7.4% | 22.3% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 7.1% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600661.SS | Shanghai Xinnanyang Only Education & Technology Co Ltd | 0.12 | 1.31 | 1.18 |
| 000526.SZ | Xiamen Unigroup Xue Co Ltd | 0.19 | 1.34 | 1.15 |
| 1317.HK | China Maple Leaf Educational Systems Ltd | 3.74 | 1.02 | 0.24 |
| 1449.HK | Leader Education Ltd | 8.02 | 0.6 | 0.07 |
| 1565.HK | Virscend Education Company Ltd | 3.47 | 0.33 | 0.08 |
| 1569.HK | Minsheng Education Group Company Ltd | 3.76 | 1.38 | 0.32 |
| 1593.HK | Chen Lin Education Group Holdings Ltd | 2.02 | 0.03 | 0.01 |
| 1756.HK | Huali University Group Ltd | 3.43 | 0.28 | 0.07 |
| 1758.HK | Bojun Education Company Ltd | 11.25 | -0.34 | -0.03 |
| 3978.HK | China Beststudy Education Group | 0.06 | 1.08 | 1.02 |
| Low | High | |
| Unlevered beta | 0.08 | 0.27 |
| Relevered beta | 0.09 | 0.3 |
| Adjusted relevered beta | 0.39 | 0.53 |
600661.SS'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 600661.SS:
cost_of_equity (6.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.39) + 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.