CAB.KL WACC - Weighted Average Cost of Capital

The WACC of CAB Cakaran Corporation Bhd (CAB.KL) is 8.5%.

The Cost of Equity of CAB Cakaran Corporation Bhd (CAB.KL) is 12.90%.

The Cost of Debt of CAB Cakaran Corporation Bhd (CAB.KL) is 4.45%.

	Range	Selected
Cost of equity	11.60% - 14.20%	12.90%
Tax rate	27.60% - 31.20%	29.40%
Cost of debt	4.00% - 4.90%	4.45%
WACC	7.7% - 9.4%	8.5%

WACC

CAB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.14	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	14.20%

Tax rate	27.60%	31.20%
Debt/Equity ratio	0.81	0.81
Cost of debt	4.00%	4.90%

After-tax WACC	7.7%	9.4%


Selected WACC	8.5%

CAB.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 CAB.KL:

cost_of_equity (12.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.14) + 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.