9911.HK WACC - Weighted Average Cost of Capital
The WACC of Newborn Town Inc (9911.HK) is 10.9%.
| Range | Selected | |
| Cost of equity | 9.3% - 12.4% | 10.85% |
| Tax rate | 1.1% - 1.6% | 1.35% |
| Cost of debt | 4.0% - 16.0% | 10% |
| WACC | 9.3% - 12.5% | 10.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.07 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 12.4% |
| Tax rate | 1.1% | 1.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 16.0% |
| After-tax WACC | 9.3% | 12.5% |
| Selected WACC | 10.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 9911.HK | Newborn Town Inc | 0.01 | 1.59 | 1.58 |
| 002253.SZ | Wisesoft Co Ltd | 0.08 | 1.2 | 1.11 |
| 1588.HK | Chanjet Information Technology Co Ltd | 0 | 0.69 | 0.69 |
| 300096.SZ | YLZ Information Technology Co Ltd | 0.01 | 1.02 | 1.02 |
| 300277.SZ | Shenzhen Hirisun Technology Inc | 0 | 1.09 | 1.09 |
| 300302.SZ | Toyou Feiji Electronics Co Ltd | 0.06 | 1.86 | 1.76 |
| 300359.SZ | Qtone Education Group Guangdong Co Ltd | 0.01 | 1.79 | 1.78 |
| 300663.SZ | Client Service International Inc | 0.17 | 1.89 | 1.62 |
| 603189.SS | Shanghai Wondertek Software Co Ltd | 0 | 1.16 | 1.16 |
| 688555.SS | Essence Information Technology Co Ltd | 1.37 | -1.25 | -0.53 |
| Low | High | |
| Unlevered beta | 1.1 | 1.33 |
| Relevered beta | 1.1 | 1.34 |
| Adjusted relevered beta | 1.07 | 1.23 |
9911.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 9911.HK:
cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.07) + 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.