UMHL WACC - Weighted Average Cost of Capital
The WACC of Umatrin Holding Ltd (UMHL) is 5.9%.
| Range | Selected | |
| Cost of equity | 15.9% - 48.3% | 32.1% |
| Tax rate | 3.0% - 10.3% | 6.65% |
| Cost of debt | 5.1% - 5.1% | 5.1% |
| WACC | 5.4% - 6.4% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 2.63 | 7.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.9% | 48.3% |
| Tax rate | 3.0% | 10.3% |
| Debt/Equity ratio | 22.25 | 22.25 |
| Cost of debt | 5.1% | 5.1% |
| After-tax WACC | 5.4% | 6.4% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UMHL | Umatrin Holding Ltd | 21.53 | -0.95 | -0.04 |
| GHAV | Grand Havana Inc | 28.98 | -0.11 | 0 |
| HSI.V | H-Source Holdings Ltd | 0.23 | 1.59 | 1.31 |
| LNBY | Landbay Inc | 0.01 | 1.94 | 1.92 |
| OLVI | Oliveda International Inc | 0.46 | 0.56 | 0.39 |
| TSHO | Tradeshow Marketing Company Ltd | 0.41 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0 | 0.39 |
| Relevered beta | 3.43 | 11.09 |
| Adjusted relevered beta | 2.63 | 7.76 |
UMHL'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 UMHL:
cost_of_equity (32.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.63) + 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.