The WACC of BLD Plantation Bhd (BLDPLNT.KL) is 7.7%.
Range | Selected | |
Cost of equity | 7.7% - 10.4% | 9.05% |
Tax rate | 28.6% - 30.1% | 29.35% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.6% - 8.8% | 7.7% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.57 | 0.71 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 10.4% |
Tax rate | 28.6% | 30.1% |
Debt/Equity ratio | 0.28 | 0.28 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.6% | 8.8% |
Selected WACC | 7.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BLDPLNT.KL | BLD Plantation Bhd | 0.28 | -0.11 | -0.09 |
CEPAT.KL | Cepatwawasan Group Bhd | 0.28 | 0.55 | 0.46 |
GOCEAN.KL | Green Ocean Corporation Bhd | 0.72 | -0.76 | -0.5 |
INNO.KL | Innoprise Plantations Bhd | 0 | 0.53 | 0.53 |
KMLOONG.KL | Kim Loong Resources Bhd | 0.07 | 0.53 | 0.5 |
KRETAM.KL | Kretam Holdings Bhd | 0.06 | 0 | 0 |
KSENG.KL | Keck Seng (Malaysia) Bhd | 0.05 | 0.53 | 0.51 |
SIMEPLT.KL | Sime Darby Plantation Bhd | 0.19 | 0.71 | 0.62 |
THPLANT.KL | TH Plantations Bhd | 1.95 | 1.05 | 0.44 |
UTDPLT.KL | United Plantations Bhd | 0 | 0.09 | 0.09 |
Low | High | |
Unlevered beta | 0.3 | 0.48 |
Relevered beta | 0.36 | 0.57 |
Adjusted relevered beta | 0.57 | 0.71 |
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 BLDPLNT.KL:
cost_of_equity (9.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.57) + 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.