The WACC of AmFIRST Real Estate Investment Trust (AMFIRST.KL) is 6.8%.
Range | Selected | |
Cost of equity | 8.4% - 10.5% | 9.45% |
Tax rate | 3.2% - 9.0% | 6.1% |
Cost of debt | 4.0% - 9.0% | 6.5% |
WACC | 4.8% - 8.7% | 6.8% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.68 | 0.73 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.4% | 10.5% |
Tax rate | 3.2% | 9.0% |
Debt/Equity ratio | 3.84 | 3.84 |
Cost of debt | 4.0% | 9.0% |
After-tax WACC | 4.8% | 8.7% |
Selected WACC | 6.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AMFIRST.KL | AmFIRST Real Estate Investment Trust | 3.84 | 0.52 | 0.11 |
ALSREIT.KL | Al-Salam Real Estate Investment Trust | 2.83 | 0.56 | 0.15 |
ARREIT.KL | AmanahRaya Real Estate Investment Trust | 2.4 | 0.38 | 0.12 |
ATRIUM.KL | Atrium Real Estate Investment Trust | 0.83 | 0.09 | 0.05 |
HEKTAR.KL | Hektar Real Estate Investment Trust | 1.96 | 0.43 | 0.15 |
SENTRAL.KL | Sentral REIT | 1.27 | 0.24 | 0.11 |
SPRIME.BK | S Prime Growth Leasehold REIT | 1.01 | 0.49 | 0.25 |
TWRREIT.KL | Tower Real Estate Investment Trust | 1.6 | 0.44 | 0.17 |
UOAREIT.KL | UOA Real Estate Investment Trust | 1.31 | 0.23 | 0.1 |
WHABT.BK | WHA Business Complex Freehold and Leasehold Real Estate Investment Trust | 0.38 | 0.15 | 0.11 |
Low | High | |
Unlevered beta | 0.11 | 0.13 |
Relevered beta | 0.52 | 0.6 |
Adjusted relevered beta | 0.68 | 0.73 |
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 AMFIRST.KL:
cost_of_equity (9.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.68) + 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.