BKAWAN.KL WACC - Weighted Average Cost of Capital

The WACC of Batu Kawan Bhd (BKAWAN.KL) is 8.4%.

The Cost of Equity of Batu Kawan Bhd (BKAWAN.KL) is 15.75%.

The Cost of Debt of Batu Kawan Bhd (BKAWAN.KL) is 4.95%.

	Range	Selected
Cost of equity	13.30% - 18.20%	15.75%
Tax rate	22.10% - 26.10%	24.10%
Cost of debt	4.40% - 5.50%	4.95%
WACC	7.2% - 9.5%	8.4%

WACC

BKAWAN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.38	1.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	18.20%

Tax rate	22.10%	26.10%
Debt/Equity ratio	1.6	1.6
Cost of debt	4.40%	5.50%

After-tax WACC	7.2%	9.5%


Selected WACC	8.4%

BKAWAN.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 BKAWAN.KL:

cost_of_equity (15.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.38) + 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.