FITTERS.KL WACC - Weighted Average Cost of Capital

The WACC of Fitters Diversified Bhd (FITTERS.KL) is 10.1%.

The Cost of Equity of Fitters Diversified Bhd (FITTERS.KL) is 10.10%.

The Cost of Debt of Fitters Diversified Bhd (FITTERS.KL) is 12.40%.

	Range	Selected
Cost of equity	8.00% - 12.20%	10.10%
Tax rate	13.50% - 20.30%	16.90%
Cost of debt	4.00% - 20.80%	12.40%
WACC	6.9% - 13.3%	10.1%

WACC

FITTERS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.62	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	12.20%

Tax rate	13.50%	20.30%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.00%	20.80%

After-tax WACC	6.9%	13.3%


Selected WACC	10.1%

FITTERS.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 FITTERS.KL:

cost_of_equity (10.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.62) + 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.