FOCUS.KL WACC - Weighted Average Cost of Capital

The WACC of Focus Dynamics Group Bhd (FOCUS.KL) is 6.1%.

The Cost of Equity of Focus Dynamics Group Bhd (FOCUS.KL) is 6.80%.

The Cost of Debt of Focus Dynamics Group Bhd (FOCUS.KL) is 10.50%.

	Range	Selected
Cost of equity	4.20% - 9.40%	6.80%
Tax rate	32.00% - 49.80%	40.90%
Cost of debt	7.00% - 14.00%	10.50%
WACC	4.7% - 7.5%	6.1%

WACC

FOCUS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	-0.23	0.33

Additional risk adjustments	2.0%	2.5%
Cost of equity	4.20%	9.40%

Tax rate	32.00%	49.80%
Debt/Equity ratio	3.9	3.9
Cost of debt	7.00%	14.00%

After-tax WACC	4.7%	7.5%


Selected WACC	6.1%

FOCUS.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 FOCUS.KL:

cost_of_equity (6.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (-0.23) + risk_adjustments (2.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.