ARREIT.KL WACC - Weighted Average Cost of Capital
The WACC of AmanahRaya Real Estate Investment Trust (ARREIT.KL) is 9.2%.
| Range | Selected | |
| Cost of equity | 7.6% - 9.9% | 8.75% |
| Tax rate | 3.9% - 6.3% | 5.1% |
| Cost of debt | 4.4% - 15.6% | 10% |
| WACC | 5.2% - 13.2% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.56 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 9.9% |
| Tax rate | 3.9% | 6.3% |
| Debt/Equity ratio | 2.5 | 2.5 |
| Cost of debt | 4.4% | 15.6% |
| After-tax WACC | 5.2% | 13.2% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARREIT.KL | AmanahRaya Real Estate Investment Trust | 2.5 | 0.32 | 0.1 |
| 145270.KS | K Top REITS Co Ltd | 1.67 | 0.15 | 0.06 |
| 4334.SR | Al Maather REIT Fund | 0.35 | 0.28 | 0.21 |
| ALSREIT.KL | Al-Salam Real Estate Investment Trust | 2.76 | 0.62 | 0.17 |
| AMFIRST.KL | AmFIRST Real Estate Investment Trust | 3.78 | 0.47 | 0.1 |
| ATRIUM.KL | Atrium Real Estate Investment Trust | 0.83 | 0.11 | 0.06 |
| AXREIT.KL | Axis Real Estate Investment Trust | 0.43 | 0.12 | 0.08 |
| HEKTAR.KL | Hektar Real Estate Investment Trust | 1.92 | 0.43 | 0.15 |
| KLCC.KL | KLCCP Stapled Group | 0.27 | 0.17 | 0.14 |
| SRIPANWA.BK | Sri Panwa Hospitality REIT | 0.58 | 0.52 | 0.34 |
| Low | High | |
| Unlevered beta | 0.1 | 0.14 |
| Relevered beta | 0.34 | 0.48 |
| Adjusted relevered beta | 0.56 | 0.65 |
ARREIT.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 ARREIT.KL:
cost_of_equity (8.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.56) + 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.