ARMADA.KL WACC - Weighted Average Cost of Capital

The WACC of Bumi Armada Bhd (ARMADA.KL) is 10.3%.

The Cost of Equity of Bumi Armada Bhd (ARMADA.KL) is 15.80%.

The Cost of Debt of Bumi Armada Bhd (ARMADA.KL) is 6.60%.

	Range	Selected
Cost of equity	13.50% - 18.10%	15.80%
Tax rate	1.90% - 2.80%	2.35%
Cost of debt	5.80% - 7.40%	6.60%
WACC	9.0% - 11.7%	10.3%

WACC

ARMADA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.42	1.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	18.10%

Tax rate	1.90%	2.80%
Debt/Equity ratio	1.4	1.4
Cost of debt	5.80%	7.40%

After-tax WACC	9.0%	11.7%


Selected WACC	10.3%

ARMADA.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 ARMADA.KL:

cost_of_equity (15.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.42) + 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.