AEONCR.KL WACC - Weighted Average Cost of Capital

The WACC of AEON Credit Service (M) Bhd (AEONCR.KL) is 6.5%.

The Cost of Equity of AEON Credit Service (M) Bhd (AEONCR.KL) is 15.80%.

The Cost of Debt of AEON Credit Service (M) Bhd (AEONCR.KL) is 5.90%.

	Range	Selected
Cost of equity	10.60% - 21.00%	15.80%
Tax rate	26.70% - 27.90%	27.30%
Cost of debt	4.40% - 7.40%	5.90%
WACC	4.7% - 8.4%	6.5%

WACC

AEONCR.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.99	2.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	21.00%

Tax rate	26.70%	27.90%
Debt/Equity ratio	4.14	4.14
Cost of debt	4.40%	7.40%

After-tax WACC	4.7%	8.4%


Selected WACC	6.5%

AEONCR.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 AEONCR.KL:

cost_of_equity (15.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.99) + 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.