8206.HK WACC - Weighted Average Cost of Capital

The WACC of Shentong Robot Education Group Co Ltd (8206.HK) is 6.0%.

The Cost of Equity of Shentong Robot Education Group Co Ltd (8206.HK) is 6.10%.

The Cost of Debt of Shentong Robot Education Group Co Ltd (8206.HK) is 5.50%.

	Range	Selected
Cost of equity	5.30% - 6.90%	6.10%
Tax rate	9.60% - 16.30%	12.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.2% - 6.8%	6.0%

WACC

8206.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.36

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.30%	6.90%

Tax rate	9.60%	16.30%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	7.00%

After-tax WACC	5.2%	6.8%


Selected WACC	6.0%

8206.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 8206.HK:

cost_of_equity (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.