FITTERS.KL WACC - Weighted Average Cost of Capital

The WACC of Fitters Diversified Bhd (FITTERS.KL) is 7.4%.

The Cost of Equity of Fitters Diversified Bhd (FITTERS.KL) is 8.50%.

The Cost of Debt of Fitters Diversified Bhd (FITTERS.KL) is 5.50%.

	Range	Selected
Cost of equity	7.40% - 9.60%	8.50%
Tax rate	13.50% - 20.30%	16.90%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.3% - 8.5%	7.4%

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	0.52	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	9.60%

Tax rate	13.50%	20.30%
Debt/Equity ratio	0.38	0.38
Cost of debt	4.00%	7.00%

After-tax WACC	6.3%	8.5%


Selected WACC	7.4%

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 (8.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.52) + 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.