The WACC of Berjaya Corporation Bhd (BJCORP.KL) is 7.0%.
Range | Selected | |
Cost of equity | 19.6% - 26.1% | 22.85% |
Tax rate | 24.0% - 24.0% | 24% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.5% - 7.5% | 7.0% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 2.31 | 2.71 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 19.6% | 26.1% |
Tax rate | 24.0% | 24.0% |
Debt/Equity ratio | 4.94 | 4.94 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.5% | 7.5% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BJCORP.KL | Berjaya Corporation Bhd | 4.94 | 0.14 | 0.03 |
5856.T | Life Intelligent Enterprise Holdings Co Ltd | 0.23 | 0.93 | 0.79 |
7744.T | Noritsu Koki Co Ltd | 0.23 | 1.27 | 1.08 |
APARINDS.NS | Apar Industries Ltd | 0.01 | 1.61 | 1.59 |
ASB.KL | Advance Synergy Bhd | 0.7 | 1.1 | 0.72 |
BSTEAD.KL | Boustead Holdings Bhd | 3.99 | 0.82 | 0.2 |
HLIND.KL | Hong Leong Industries Bhd | 0.01 | 0.96 | 0.96 |
PNC.VN | Phuong Nam Cultural Joint Stock Corp | 0 | 0.69 | 0.69 |
SIME.KL | Sime Darby Bhd | 1.24 | 1.02 | 0.53 |
TEXCHEM.KL | Texchem Resources Bhd | 4.16 | 0.25 | 0.06 |
Low | High | |
Unlevered beta | 0.62 | 0.75 |
Relevered beta | 2.96 | 3.55 |
Adjusted relevered beta | 2.31 | 2.71 |
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 BJCORP.KL:
cost_of_equity (22.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (2.31) + 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.