The WACC of Dolomite Corp Bhd (DOLMITE.KL) is 6.0%.
| Range | Selected | |
| Cost of equity | 4.10% - 49.30% | 26.70% |
| Tax rate | 12.10% - 17.00% | 14.55% |
| Cost of debt | 5.00% - 7.00% | 6.00% |
| WACC | 4.4% - 7.7% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | -4.34 | 1.85 |
| Additional risk adjustments | 30.0% | 30.5% |
| Cost of equity | 4.10% | 49.30% |
| Tax rate | 12.10% | 17.00% |
| Debt/Equity ratio | 22.59 | 22.59 |
| Cost of debt | 5.00% | 7.00% |
| After-tax WACC | 4.4% | 7.7% |
| Selected WACC | 6.0% | |
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 DOLMITE.KL:
cost_of_equity (26.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (-4.34) + risk_adjustments (30.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.