BURSA.KL WACC - Weighted Average Cost of Capital

The WACC of Bursa Malaysia Bhd (BURSA.KL) is 11.2%.

The Cost of Equity of Bursa Malaysia Bhd (BURSA.KL) is 11.25%.

The Cost of Debt of Bursa Malaysia Bhd (BURSA.KL) is 5.55%.

	Range	Selected
Cost of equity	9.70% - 12.80%	11.25%
Tax rate	25.20% - 25.60%	25.40%
Cost of debt	4.40% - 6.70%	5.55%
WACC	9.7% - 12.8%	11.2%

WACC

BURSA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.86	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.80%

Tax rate	25.20%	25.60%
Debt/Equity ratio	0	0
Cost of debt	4.40%	6.70%

After-tax WACC	9.7%	12.8%


Selected WACC	11.2%

BURSA.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 BURSA.KL:

cost_of_equity (11.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.86) + 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.