BARAKAH.KL WACC - Weighted Average Cost of Capital

The WACC of Barakah Offshore Petroleum Bhd (BARAKAH.KL) is 7.6%.

The Cost of Equity of Barakah Offshore Petroleum Bhd (BARAKAH.KL) is 12.85%.

The Cost of Debt of Barakah Offshore Petroleum Bhd (BARAKAH.KL) is 4.25%.

	Range	Selected
Cost of equity	10.50% - 15.20%	12.85%
Tax rate	3.50% - 5.80%	4.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.5% - 8.6%	7.6%

WACC

BARAKAH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.98	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	15.20%

Tax rate	3.50%	5.80%
Debt/Equity ratio	1.51	1.51
Cost of debt	4.00%	4.50%

After-tax WACC	6.5%	8.6%


Selected WACC	7.6%

BARAKAH.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 BARAKAH.KL:

cost_of_equity (12.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.98) + 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.