EDARAN.KL WACC - Weighted Average Cost of Capital

The WACC of Edaran Bhd (EDARAN.KL) is 8.5%.

The Cost of Equity of Edaran Bhd (EDARAN.KL) is 14.30%.

The Cost of Debt of Edaran Bhd (EDARAN.KL) is 8.50%.

	Range	Selected
Cost of equity	11.50% - 17.10%	14.30%
Tax rate	38.60% - 44.50%	41.55%
Cost of debt	4.90% - 12.10%	8.50%
WACC	6.3% - 10.7%	8.5%

WACC

EDARAN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.13	1.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	17.10%

Tax rate	38.60%	44.50%
Debt/Equity ratio	1.55	1.55
Cost of debt	4.90%	12.10%

After-tax WACC	6.3%	10.7%


Selected WACC	8.5%

EDARAN.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 EDARAN.KL:

cost_of_equity (14.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.13) + 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.