CLCN WACC - Weighted Average Cost of Capital
The WACC of Creative Learning Corp (CLCN) is 7.0%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.5% | 6.6% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 18.8% | 12.9% |
| WACC | 5.6% - 8.4% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.31 | 0.38 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 7.0% | 18.8% |
| After-tax WACC | 5.6% | 8.4% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.28 |
| AMBO | Ambow Education Holding Ltd | 0.04 | 0.91 | 0.89 |
| CHN.V | China Education Resources Inc | 1.74 | 0.36 | 0.16 |
| CLEU | China Liberal Education Holdings Ltd | 0.26 | 3.56 | 3 |
| EVCI | EVCI Career Colleges Holding Corp | 25.8 | 0.49 | 0.02 |
| FEDU | Four Seasons Education (Cayman) Inc | 0.01 | 0.46 | 0.46 |
| LTRE | Learning Tree International Inc | 0.31 | 0.92 | 0.75 |
| METX | Meten Edtechx Education Group Ltd | 15.18 | 1.61 | 0.13 |
| ONE | OneSmart International Education Group Ltd | 34.06 | 0.09 | 0 |
| PCSV | PCS Edventures! Inc | 1.07 | 0.22 | 0.12 |
| Low | High | |
| Unlevered beta | 0.13 | 0.28 |
| Relevered beta | -0.03 | 0.07 |
| Adjusted relevered beta | 0.31 | 0.38 |
CLCN'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 CLCN:
cost_of_equity (6.60%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.31) + 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.