CWG.KL WACC - Weighted Average Cost of Capital

The WACC of CWG Holdings Bhd (CWG.KL) is 7.4%.

The Cost of Equity of CWG Holdings Bhd (CWG.KL) is 8.25%.

The Cost of Debt of CWG Holdings Bhd (CWG.KL) is 4.25%.

	Range	Selected
Cost of equity	6.80% - 9.70%	8.25%
Tax rate	23.80% - 26.00%	24.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.1% - 8.6%	7.4%

WACC

CWG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.44	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.70%

Tax rate	23.80%	26.00%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.00%	4.50%

After-tax WACC	6.1%	8.6%


Selected WACC	7.4%

CWG.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 CWG.KL:

cost_of_equity (8.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.44) + 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.