ADVCON.KL WACC - Weighted Average Cost of Capital

The WACC of Advancecon Holdings Bhd (ADVCON.KL) is 12.8%.

The Cost of Equity of Advancecon Holdings Bhd (ADVCON.KL) is 14.05%.

The Cost of Debt of Advancecon Holdings Bhd (ADVCON.KL) is 15.05%.

	Range	Selected
Cost of equity	11.80% - 16.30%	14.05%
Tax rate	5.90% - 23.50%	14.70%
Cost of debt	6.30% - 23.80%	15.05%
WACC	8.1% - 17.5%	12.8%

WACC

ADVCON.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.17	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	16.30%

Tax rate	5.90%	23.50%
Debt/Equity ratio	1.7	1.7
Cost of debt	6.30%	23.80%

After-tax WACC	8.1%	17.5%


Selected WACC	12.8%

ADVCON.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 ADVCON.KL:

cost_of_equity (14.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.17) + 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.