FIHB.KL WACC - Weighted Average Cost of Capital

The WACC of Federal International Holdings Bhd (FIHB.KL) is 9.6%.

The Cost of Equity of Federal International Holdings Bhd (FIHB.KL) is 9.65%.

The Cost of Debt of Federal International Holdings Bhd (FIHB.KL) is 14.25%.

	Range	Selected
Cost of equity	7.00% - 12.30%	9.65%
Tax rate	27.80% - 35.20%	31.50%
Cost of debt	7.70% - 20.80%	14.25%
WACC	6.4% - 12.7%	9.6%

WACC

FIHB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.47	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	12.30%

Tax rate	27.80%	35.20%
Debt/Equity ratio	0.68	0.68
Cost of debt	7.70%	20.80%

After-tax WACC	6.4%	12.7%


Selected WACC	9.6%

FIHB.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 FIHB.KL:

cost_of_equity (9.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.47) + 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.