FGV.KL WACC - Weighted Average Cost of Capital

The WACC of FGV Holdings Bhd (FGV.KL) is 8.1%.

The Cost of Equity of FGV Holdings Bhd (FGV.KL) is 12.15%.

The Cost of Debt of FGV Holdings Bhd (FGV.KL) is 4.75%.

	Range	Selected
Cost of equity	10.80% - 13.50%	12.15%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	4.00% - 5.50%	4.75%
WACC	7.2% - 9.1%	8.1%

WACC

FGV.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.02	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.50%

Tax rate	24.00%	24.00%
Debt/Equity ratio	0.88	0.88
Cost of debt	4.00%	5.50%

After-tax WACC	7.2%	9.1%


Selected WACC	8.1%

FGV.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 FGV.KL:

cost_of_equity (12.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.02) + 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.