CO WACC - Weighted Average Cost of Capital
The WACC of Global Cord Blood Corp (CO) is 6.6%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.3% | 9.15% |
| Tax rate | 17.1% - 17.7% | 17.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.2% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.76 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.3% |
| Tax rate | 17.1% | 17.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.2% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CO | Global Cord Blood Corp | 0.91 | -0.06 | -0.04 |
| AIH | Aesthetic Medical International Holdings Group Ltd | 3.4 | 1.62 | 0.42 |
| CCEL | Cryo-Cell International Inc | 0.21 | -0.18 | -0.15 |
| IOM.V | Assure Holdings Corp | 0.14 | 1.89 | 1.7 |
| MBCN.TO | MindBeacon Holdings Inc | 0.02 | 0.91 | 0.9 |
| NLH.V | Nova Leap Health Corp | 0.16 | -0.01 | -0.01 |
| PCHM | PharmChem Inc | 0.82 | -0.12 | -0.07 |
| PMD | Psychemedics Corp | 0.02 | 1.03 | 1.02 |
| 3309.HK | C-Mer Eye Care Holdings Ltd | 0.21 | 1.24 | 1.06 |
| 8037.HK | China Biotech Services Holdings Ltd | 0.28 | 0.34 | 0.28 |
| 8307.HK | Medicskin Holdings Ltd | 0.09 | 0.93 | 0.87 |
| Low | High | |
| Unlevered beta | 0.28 | 0.87 |
| Relevered beta | 0.64 | 0.78 |
| Adjusted relevered beta | 0.76 | 0.85 |
CO'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 CO:
cost_of_equity (9.15%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.76) + 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.