ESCERAM.KL WACC - Weighted Average Cost of Capital

The WACC of ES Ceramics Technology Bhd (ESCERAM.KL) is 13.4%.

The Cost of Equity of ES Ceramics Technology Bhd (ESCERAM.KL) is 8.10%.

The Cost of Debt of ES Ceramics Technology Bhd (ESCERAM.KL) is 29.35%.

	Range	Selected
Cost of equity	6.70% - 9.50%	8.10%
Tax rate	9.40% - 12.30%	10.85%
Cost of debt	7.00% - 51.70%	29.35%
WACC	6.6% - 20.3%	13.4%

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	0.42	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.50%

Tax rate	9.40%	12.30%
Debt/Equity ratio	0.43	0.43
Cost of debt	7.00%	51.70%

After-tax WACC	6.6%	20.3%


Selected WACC	13.4%

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 (8.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.42) + 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.