NAUH WACC - Weighted Average Cost of Capital
The WACC of National American University Holdings Inc (NAUH) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.7% | 6.4% |
| Tax rate | 12.9% - 26.1% | 19.5% |
| Cost of debt | 7.0% - 7.1% | 7.05% |
| WACC | 6.1% - 5.3% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.06 | 0.32 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 5.1% | 7.7% |
| Tax rate | 12.9% | 26.1% |
| Debt/Equity ratio | 36.39 | 36.39 |
| Cost of debt | 7.0% | 7.1% |
| After-tax WACC | 6.1% | 5.3% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NAUH | National American University Holdings Inc | 36.39 | -0.09 | 0 |
| AMBO | Ambow Education Holding Ltd | 0.04 | 1.06 | 1.03 |
| CATG | Capstone Technologies Group Inc | 54.38 | -0.67 | -0.02 |
| CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.28 |
| EDTK | Skillful Craftsman Education Technology Ltd | 0.96 | -0.15 | -0.09 |
| EVCI | EVCI Career Colleges Holding Corp | 25.8 | 0.49 | 0.02 |
| HLG | Hailiang Education Group Inc | 0.02 | -0.01 | -0.01 |
| MBA.TO | CIBT Education Group Inc | 11.24 | 1.19 | 0.12 |
| ONE | OneSmart International Education Group Ltd | 34.06 | 0.09 | 0 |
| TEDU | Tarena International Inc | 0.58 | -0.28 | -0.19 |
| Low | High | |
| Unlevered beta | -0.01 | 0 |
| Relevered beta | -0.4 | -0.01 |
| Adjusted relevered beta | 0.06 | 0.32 |
NAUH'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 NAUH:
cost_of_equity (6.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.06) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.