The WACC of Brahim's Holdings Bhd (BRAHIMS.KL) is 4.7%.
| Range | Selected | |
| Cost of equity | 32.40% - 79.00% | 55.70% |
| Tax rate | 11.10% - 35.80% | 23.45% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 3.9% - 5.4% | 4.7% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 4.75 | 10.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 32.40% | 79.00% |
| Tax rate | 11.10% | 35.80% |
| Debt/Equity ratio | 78.14 | 78.14 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 3.9% | 5.4% |
| Selected WACC | 4.7% | |
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 BRAHIMS.KL:
cost_of_equity (55.70%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (4.75) + 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.