ACO.KL WACC - Weighted Average Cost of Capital

The WACC of Aco Group Bhd (ACO.KL) is 6.5%.

The Cost of Equity of Aco Group Bhd (ACO.KL) is 7.70%.

The Cost of Debt of Aco Group Bhd (ACO.KL) is 4.25%.

	Range	Selected
Cost of equity	6.40% - 9.00%	7.70%
Tax rate	24.50% - 28.70%	26.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 7.4%	6.5%

WACC

ACO.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.38	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.00%

Tax rate	24.50%	28.70%
Debt/Equity ratio	0.36	0.36
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	7.4%


Selected WACC	6.5%

ACO.KL'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 ACO.KL:

cost_of_equity (7.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.38) + 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.