ESCERAM.KL WACC - Weighted Average Cost of Capital

The WACC of ES Ceramics Technology Bhd (ESCERAM.KL) is 11.2%.

The Cost of Equity of ES Ceramics Technology Bhd (ESCERAM.KL) is 9.15%.

The Cost of Debt of ES Ceramics Technology Bhd (ESCERAM.KL) is 28.45%.

	Range	Selected
Cost of equity	6.80% - 11.50%	9.15%
Tax rate	17.20% - 29.70%	23.45%
Cost of debt	4.50% - 52.40%	28.45%
WACC	6.2% - 16.2%	11.2%

WACC

ESCERAM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.44	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	11.50%

Tax rate	17.20%	29.70%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.50%	52.40%

After-tax WACC	6.2%	16.2%


Selected WACC	11.2%

ESCERAM.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 ESCERAM.KL:

cost_of_equity (9.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.44) + 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.