CTOS.KL WACC - Weighted Average Cost of Capital

The WACC of CTOS Digital Bhd (CTOS.KL) is 7.8%.

The Cost of Equity of CTOS Digital Bhd (CTOS.KL) is 7.60%.

The Cost of Debt of CTOS Digital Bhd (CTOS.KL) is 11.15%.

	Range	Selected
Cost of equity	6.90% - 8.30%	7.60%
Tax rate	7.70% - 11.90%	9.80%
Cost of debt	4.50% - 17.80%	11.15%
WACC	6.7% - 8.9%	7.8%

WACC

CTOS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.45	0.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	8.30%

Tax rate	7.70%	11.90%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.50%	17.80%

After-tax WACC	6.7%	8.9%


Selected WACC	7.8%

CTOS.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 CTOS.KL:

cost_of_equity (7.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.45) + 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.