BERTAM.KL WACC - Weighted Average Cost of Capital

The WACC of Bertam Alliance Bhd (BERTAM.KL) is 8.1%.

The Cost of Equity of Bertam Alliance Bhd (BERTAM.KL) is 8.75%.

The Cost of Debt of Bertam Alliance Bhd (BERTAM.KL) is 5.15%.

	Range	Selected
Cost of equity	6.90% - 10.60%	8.75%
Tax rate	6.20% - 12.40%	9.30%
Cost of debt	4.70% - 5.60%	5.15%
WACC	6.5% - 9.7%	8.1%

WACC

BERTAM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.45	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.60%

Tax rate	6.20%	12.40%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.70%	5.60%

After-tax WACC	6.5%	9.7%


Selected WACC	8.1%

BERTAM.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 BERTAM.KL:

cost_of_equity (8.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.45) + 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.