FOCUS.KL WACC - Weighted Average Cost of Capital

The WACC of Focus Dynamics Group Bhd (FOCUS.KL) is 9.2%.

The Cost of Equity of Focus Dynamics Group Bhd (FOCUS.KL) is 9.75%.

The Cost of Debt of Focus Dynamics Group Bhd (FOCUS.KL) is 11.75%.

	Range	Selected
Cost of equity	6.30% - 13.20%	9.75%
Tax rate	29.90% - 40.70%	35.30%
Cost of debt	4.50% - 19.00%	11.75%
WACC	5.7% - 12.8%	9.2%

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	0.37	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	13.20%

Tax rate	29.90%	40.70%
Debt/Equity ratio	0.25	0.25
Cost of debt	4.50%	19.00%

After-tax WACC	5.7%	12.8%


Selected WACC	9.2%

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 (9.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.37) + 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.