ASTRO.KL WACC - Weighted Average Cost of Capital

The WACC of Astro Malaysia Holdings Bhd (ASTRO.KL) is 6.2%.

The Cost of Equity of Astro Malaysia Holdings Bhd (ASTRO.KL) is 18.30%.

The Cost of Debt of Astro Malaysia Holdings Bhd (ASTRO.KL) is 6.85%.

	Range	Selected
Cost of equity	15.30% - 21.30%	18.30%
Tax rate	28.00% - 30.80%	29.40%
Cost of debt	4.70% - 9.00%	6.85%
WACC	4.6% - 7.8%	6.2%

WACC

ASTRO.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.69	2.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	21.30%

Tax rate	28.00%	30.80%
Debt/Equity ratio	8.5	8.5
Cost of debt	4.70%	9.00%

After-tax WACC	4.6%	7.8%


Selected WACC	6.2%

ASTRO.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 ASTRO.KL:

cost_of_equity (18.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.69) + 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.