ZCMD WACC - Weighted Average Cost of Capital
The WACC of Zhongchao Inc (ZCMD) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.6% | 6.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 5.6% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.31 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 5.6% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ZCMD | Zhongchao Inc | 1.15 | -0.42 | -0.23 |
| AMBO | Ambow Education Holding Ltd | 0.05 | 0.86 | 0.83 |
| CATG | Capstone Technologies Group Inc | 54.38 | -0.58 | -0.01 |
| CHN.V | China Education Resources Inc | 1.74 | 0.36 | 0.16 |
| CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.28 |
| EDTK | Skillful Craftsman Education Technology Ltd | 0.88 | -0.36 | -0.22 |
| FEDU | Four Seasons Education (Cayman) Inc | 0.24 | 0.61 | 0.52 |
| METX | Meten Edtechx Education Group Ltd | 15.18 | 1.61 | 0.13 |
| NAUH | National American University Holdings Inc | 29.52 | -0.33 | -0.01 |
| TEDU | Tarena International Inc | 0.58 | -0.28 | -0.2 |
| VTRU | Vitru Ltd | 1.48 | 0.74 | 0.36 |
| Low | High | |
| Unlevered beta | -0.01 | 0.13 |
| Relevered beta | -0.03 | 0.24 |
| Adjusted relevered beta | 0.31 | 0.49 |
ZCMD'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 ZCMD:
cost_of_equity (6.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.31) + 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.