CMSB.KL WACC - Weighted Average Cost of Capital

The WACC of Cahya Mata Sarawak Bhd (CMSB.KL) is 9.1%.

The Cost of Equity of Cahya Mata Sarawak Bhd (CMSB.KL) is 10.40%.

The Cost of Debt of Cahya Mata Sarawak Bhd (CMSB.KL) is 5.30%.

	Range	Selected
Cost of equity	7.90% - 12.90%	10.40%
Tax rate	31.40% - 35.10%	33.25%
Cost of debt	5.00% - 5.60%	5.30%
WACC	7.1% - 11.2%	9.1%

WACC

CMSB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.6	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	12.90%

Tax rate	31.40%	35.10%
Debt/Equity ratio	0.22	0.22
Cost of debt	5.00%	5.60%

After-tax WACC	7.1%	11.2%


Selected WACC	9.1%

CMSB.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 CMSB.KL:

cost_of_equity (10.40%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.6) + 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.