FAVCO.KL
Favelle Favco Bhd
Price:  
1.74 
MYR
Volume:  
10,600.00
Malaysia | Machinery
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FAVCO.KL WACC - Weighted Average Cost of Capital

The WACC of Favelle Favco Bhd (FAVCO.KL) is 7.5%.

The Cost of Equity of Favelle Favco Bhd (FAVCO.KL) is 8.70%.
The Cost of Debt of Favelle Favco Bhd (FAVCO.KL) is 4.25%.

Range Selected
Cost of equity 7.20% - 10.20% 8.70%
Tax rate 24.70% - 27.10% 25.90%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.3% - 8.7% 7.5%
WACC

FAVCO.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.5 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 10.20%
Tax rate 24.70% 27.10%
Debt/Equity ratio 0.28 0.28
Cost of debt 4.00% 4.50%
After-tax WACC 6.3% 8.7%
Selected WACC 7.5%

FAVCO.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 FAVCO.KL:

cost_of_equity (8.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.5) + 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.