BOILERM.KL WACC - Weighted Average Cost of Capital

The WACC of Boilermech Holdings Bhd (BOILERM.KL) is 9.0%.

The Cost of Equity of Boilermech Holdings Bhd (BOILERM.KL) is 9.10%.

The Cost of Debt of Boilermech Holdings Bhd (BOILERM.KL) is 4.50%.

	Range	Selected
Cost of equity	7.70% - 10.50%	9.10%
Tax rate	24.40% - 24.90%	24.65%
Cost of debt	4.40% - 4.60%	4.50%
WACC	7.7% - 10.4%	9.0%

WACC

BOILERM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	7.3%	8.3%
Adjusted beta	0.53	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.50%

Tax rate	24.40%	24.90%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.40%	4.60%

After-tax WACC	7.7%	10.4%


Selected WACC	9.0%

BOILERM.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 BOILERM.KL:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (7.80%) * adjusted_beta (0.53) + 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.