The WACC of China Liberal Education Holdings Ltd (CLEU) is 6.4%.
Range | Selected | |
Cost of equity | 6.0% - 8.0% | 7% |
Tax rate | 23.2% - 25.7% | 24.45% |
Cost of debt | 7.0% - 7.0% | 7% |
WACC | 5.8% - 7.1% | 6.4% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.46 | 0.56 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 8.0% |
Tax rate | 23.2% | 25.7% |
Debt/Equity ratio | 0.47 | 0.47 |
Cost of debt | 7.0% | 7.0% |
After-tax WACC | 5.8% | 7.1% |
Selected WACC | 6.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CLEU | China Liberal Education Holdings Ltd | 0.47 | 2.77 | 2.05 |
AFYA | Afya Ltd | 0.35 | 0.44 | 0.35 |
AMBO | Ambow Education Holding Ltd | 0.05 | 0.88 | 0.85 |
ASPU | Aspen Group Inc | 3.02 | 0.42 | 0.13 |
CHN.V | China Education Resources Inc | 1.74 | 0.36 | 0.16 |
CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.28 |
FEDU | Four Seasons Education (Cayman) Inc | 0.28 | 0.63 | 0.52 |
MBA.TO | CIBT Education Group Inc | 11.24 | 1.19 | 0.13 |
METX | Meten Edtechx Education Group Ltd | 15.18 | 1.61 | 0.13 |
NEW | Puxin Ltd | 11.42 | 1.68 | 0.18 |
VTRU | Vitru Ltd | 1.5 | 0.74 | 0.35 |
Low | High | |
Unlevered beta | 0.16 | 0.35 |
Relevered beta | 0.19 | 0.34 |
Adjusted relevered beta | 0.46 | 0.56 |
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 CLEU:
cost_of_equity (7.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.46) + 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.