METX WACC - Weighted Average Cost of Capital
The WACC of Meten Edtechx Education Group Ltd (METX) is 5.3%.
| Range | Selected | |
| Cost of equity | 11.7% - 22.5% | 17.1% |
| Tax rate | 0.9% - 18.2% | 9.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 5.2% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 1.5 | 2.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.7% | 22.5% |
| Tax rate | 0.9% | 18.2% |
| Debt/Equity ratio | 15.18 | 15.18 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 5.2% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| METX | Meten Edtechx Education Group Ltd | 15.18 | 1.61 | 0.1 |
| AFYA | Afya Ltd | 0.31 | 0.57 | 0.44 |
| AMBO | Ambow Education Holding Ltd | 0.04 | 1.06 | 1.02 |
| BEDU | Bright Scholar Education Holdings Ltd | 0.86 | -0.7 | -0.38 |
| CHN.V | China Education Resources Inc | 1.74 | 0.36 | 0.13 |
| CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.27 |
| CLEU | China Liberal Education Holdings Ltd | 0.35 | 3.51 | 2.61 |
| FEDU | Four Seasons Education (Cayman) Inc | 0.01 | 0.43 | 0.42 |
| PCSV | PCS Edventures! Inc | 0.82 | 0.27 | 0.15 |
| VTRU | Vitru Ltd | 1.46 | 0.74 | 0.3 |
| Low | High | |
| Unlevered beta | 0.14 | 0.35 |
| Relevered beta | 1.75 | 3.82 |
| Adjusted relevered beta | 1.5 | 2.89 |
METX'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 METX:
cost_of_equity (17.10%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (1.5) + 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.