BERTAM.KL WACC - Weighted Average Cost of Capital

The WACC of Bertam Alliance Bhd (BERTAM.KL) is 7.0%.

The Cost of Equity of Bertam Alliance Bhd (BERTAM.KL) is 7.25%.

The Cost of Debt of Bertam Alliance Bhd (BERTAM.KL) is 5.30%.

	Range	Selected
Cost of equity	6.10% - 8.40%	7.25%
Tax rate	6.10% - 12.30%	9.20%
Cost of debt	5.00% - 5.60%	5.30%
WACC	5.9% - 8.0%	7.0%

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	0.34	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.40%

Tax rate	6.10%	12.30%
Debt/Equity ratio	0.15	0.15
Cost of debt	5.00%	5.60%

After-tax WACC	5.9%	8.0%


Selected WACC	7.0%

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 (7.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.34) + 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.