BIG.KL WACC - Weighted Average Cost of Capital

The WACC of BIG Industries Bhd (BIG.KL) is 9.3%.

The Cost of Equity of BIG Industries Bhd (BIG.KL) is 9.65%.

The Cost of Debt of BIG Industries Bhd (BIG.KL) is 5.85%.

	Range	Selected
Cost of equity	6.40% - 12.90%	9.65%
Tax rate	11.00% - 16.80%	13.90%
Cost of debt	4.40% - 7.30%	5.85%
WACC	6.3% - 12.4%	9.3%

WACC

BIG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.39	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	12.90%

Tax rate	11.00%	16.80%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.40%	7.30%

After-tax WACC	6.3%	12.4%


Selected WACC	9.3%

BIG.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 BIG.KL:

cost_of_equity (9.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.39) + 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.