ENGKAH.KL WACC - Weighted Average Cost of Capital

The WACC of Eng Kah Corporation Bhd (ENGKAH.KL) is 11.1%.

The Cost of Equity of Eng Kah Corporation Bhd (ENGKAH.KL) is 11.10%.

The Cost of Debt of Eng Kah Corporation Bhd (ENGKAH.KL) is 8.30%.

	Range	Selected
Cost of equity	9.60% - 12.60%	11.10%
Tax rate	11.80% - 18.00%	14.90%
Cost of debt	7.00% - 9.60%	8.30%
WACC	9.6% - 12.5%	11.1%

WACC

ENGKAH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.85	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.60%

Tax rate	11.80%	18.00%
Debt/Equity ratio	0	0
Cost of debt	7.00%	9.60%

After-tax WACC	9.6%	12.5%


Selected WACC	11.1%

ENGKAH.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 ENGKAH.KL:

cost_of_equity (11.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.85) + 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.