FIAMMA.KL WACC - Weighted Average Cost of Capital

The WACC of Fiamma Holdings Bhd (FIAMMA.KL) is 8.0%.

The Cost of Equity of Fiamma Holdings Bhd (FIAMMA.KL) is 8.85%.

The Cost of Debt of Fiamma Holdings Bhd (FIAMMA.KL) is 4.90%.

	Range	Selected
Cost of equity	6.80% - 10.90%	8.85%
Tax rate	17.20% - 18.10%	17.65%
Cost of debt	4.90% - 4.90%	4.90%
WACC	6.3% - 9.6%	8.0%

WACC

FIAMMA.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	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.90%

Tax rate	17.20%	18.10%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.90%	4.90%

After-tax WACC	6.3%	9.6%


Selected WACC	8.0%

FIAMMA.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 FIAMMA.KL:

cost_of_equity (8.85%) = 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.