EDGENTA.KL WACC - Weighted Average Cost of Capital

The WACC of UEM Edgenta Bhd (EDGENTA.KL) is 7.9%.

The Cost of Equity of UEM Edgenta Bhd (EDGENTA.KL) is 10.50%.

The Cost of Debt of UEM Edgenta Bhd (EDGENTA.KL) is 5.50%.

	Range	Selected
Cost of equity	8.80% - 12.20%	10.50%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.5% - 9.4%	7.9%

WACC

EDGENTA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.73	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	12.20%

Tax rate	24.00%	24.00%
Debt/Equity ratio	0.68	0.68
Cost of debt	4.00%	7.00%

After-tax WACC	6.5%	9.4%


Selected WACC	7.9%

EDGENTA.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 EDGENTA.KL:

cost_of_equity (10.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.73) + 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.