AIRASIA.KL WACC - Weighted Average Cost of Capital

The WACC of Airasia Group Bhd (AIRASIA.KL) is 9.0%.

The Cost of Equity of Airasia Group Bhd (AIRASIA.KL) is 13.30%.

The Cost of Debt of Airasia Group Bhd (AIRASIA.KL) is 10.70%.

	Range	Selected
Cost of equity	11.30% - 15.30%	13.30%
Tax rate	17.30% - 25.60%	21.45%
Cost of debt	4.90% - 16.50%	10.70%
WACC	5.3% - 12.8%	9.0%

WACC

AIRASIA.KL WACC calculation

Category	Low	High

Long-term bond rate	4.2%	4.7%
Equity market risk premium	5.9%	6.9%
Adjusted beta	1.19	1.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	15.30%

Tax rate	17.30%	25.60%
Debt/Equity ratio	4.93	4.93
Cost of debt	4.90%	16.50%

After-tax WACC	5.3%	12.8%


Selected WACC	9.0%

AIRASIA.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 AIRASIA.KL:

cost_of_equity (13.30%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (1.19) + 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.