ENGTEX.KL WACC - Weighted Average Cost of Capital

The WACC of Engtex Group Bhd (ENGTEX.KL) is 6.1%.

The Cost of Equity of Engtex Group Bhd (ENGTEX.KL) is 7.95%.

The Cost of Debt of Engtex Group Bhd (ENGTEX.KL) is 8.35%.

	Range	Selected
Cost of equity	6.50% - 9.40%	7.95%
Tax rate	37.40% - 43.50%	40.45%
Cost of debt	4.40% - 12.30%	8.35%
WACC	4.3% - 8.0%	6.1%

WACC

ENGTEX.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.4	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.40%

Tax rate	37.40%	43.50%
Debt/Equity ratio	1.39	1.39
Cost of debt	4.40%	12.30%

After-tax WACC	4.3%	8.0%


Selected WACC	6.1%

ENGTEX.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 ENGTEX.KL:

cost_of_equity (7.95%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.