DOMINAN.KL WACC - Weighted Average Cost of Capital

The WACC of Dominant Enterprise Bhd (DOMINAN.KL) is 5.6%.

The Cost of Equity of Dominant Enterprise Bhd (DOMINAN.KL) is 9.15%.

The Cost of Debt of Dominant Enterprise Bhd (DOMINAN.KL) is 4.50%.

	Range	Selected
Cost of equity	7.90% - 10.40%	9.15%
Tax rate	25.70% - 27.20%	26.45%
Cost of debt	4.00% - 5.00%	4.50%
WACC	4.9% - 6.2%	5.6%

WACC

DOMINAN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.61	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.40%

Tax rate	25.70%	27.20%
Debt/Equity ratio	1.59	1.59
Cost of debt	4.00%	5.00%

After-tax WACC	4.9%	6.2%


Selected WACC	5.6%

DOMINAN.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 DOMINAN.KL:

cost_of_equity (9.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.61) + 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.