667.HK WACC - Weighted Average Cost of Capital

The WACC of China East Education Holdings Ltd (667.HK) is 8.0%.

The Cost of Equity of China East Education Holdings Ltd (667.HK) is 8.45%.

The Cost of Debt of China East Education Holdings Ltd (667.HK) is 6.45%.

	Range	Selected
Cost of equity	6.30% - 10.60%	8.45%
Tax rate	26.10% - 29.90%	28.00%
Cost of debt	4.10% - 8.80%	6.45%
WACC	5.9% - 10.1%	8.0%

WACC

667.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.58	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	10.60%

Tax rate	26.10%	29.90%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.10%	8.80%

After-tax WACC	5.9%	10.1%


Selected WACC	8.0%

667.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 667.HK:

cost_of_equity (8.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.