ARMADA.KL
Bumi Armada Bhd
Price:  
0.49 
MYR
Volume:  
14,047,100.00
Malaysia | Energy Equipment & Services
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ARMADA.KL WACC - Weighted Average Cost of Capital

The WACC of Bumi Armada Bhd (ARMADA.KL) is 9.8%.

The Cost of Equity of Bumi Armada Bhd (ARMADA.KL) is 15.65%.
The Cost of Debt of Bumi Armada Bhd (ARMADA.KL) is 6.10%.

Range Selected
Cost of equity 13.70% - 17.60% 15.65%
Tax rate 1.90% - 2.80% 2.35%
Cost of debt 4.80% - 7.40% 6.10%
WACC 8.2% - 11.3% 9.8%
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 1.45 1.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.70% 17.60%
Tax rate 1.90% 2.80%
Debt/Equity ratio 1.53 1.53
Cost of debt 4.80% 7.40%
After-tax WACC 8.2% 11.3%
Selected WACC 9.8%

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 (15.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.45) + 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.