The WACC of Berjaya Sports Toto Bhd (BJTOTO.KL) is 7.1%.
| Range | Selected | |
| Cost of equity | 8.00% - 10.40% | 9.20% |
| Tax rate | 35.00% - 36.00% | 35.50% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 6.3% - 7.9% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 0.63 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.00% | 10.40% |
| Tax rate | 35.00% | 36.00% |
| Debt/Equity ratio | 0.54 | 0.54 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 6.3% | 7.9% |
| Selected WACC | 7.1% | |
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 BJTOTO.KL:
cost_of_equity (9.20%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.63) + 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.