BERTAM.KL WACC - Weighted Average Cost of Capital

The WACC of Bertam Alliance Bhd (BERTAM.KL) is 7.9%.

The Cost of Equity of Bertam Alliance Bhd (BERTAM.KL) is 8.20%.

The Cost of Debt of Bertam Alliance Bhd (BERTAM.KL) is 5.05%.

	Range	Selected
Cost of equity	6.50% - 9.90%	8.20%
Tax rate	0.90% - 7.70%	4.30%
Cost of debt	4.70% - 5.40%	5.05%
WACC	6.4% - 9.5%	7.9%

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	0.4	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.90%

Tax rate	0.90%	7.70%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.70%	5.40%

After-tax WACC	6.4%	9.5%


Selected WACC	7.9%

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 (8.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.