DANCO.KL WACC - Weighted Average Cost of Capital

The WACC of Dancomech Holdings Bhd (DANCO.KL) is 9.1%.

The Cost of Equity of Dancomech Holdings Bhd (DANCO.KL) is 9.70%.

The Cost of Debt of Dancomech Holdings Bhd (DANCO.KL) is 4.45%.

	Range	Selected
Cost of equity	8.60% - 10.80%	9.70%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.40% - 4.50%	4.45%
WACC	8.2% - 10.1%	9.1%

WACC

DANCO.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.7	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	10.80%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.40%	4.50%

After-tax WACC	8.2%	10.1%


Selected WACC	9.1%

DANCO.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 DANCO.KL:

cost_of_equity (9.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.7) + 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.