FREIGHT.KL WACC - Weighted Average Cost of Capital

The WACC of Freight Management Holdings Bhd (FREIGHT.KL) is 9.0%.

The Cost of Equity of Freight Management Holdings Bhd (FREIGHT.KL) is 10.20%.

The Cost of Debt of Freight Management Holdings Bhd (FREIGHT.KL) is 4.80%.

	Range	Selected
Cost of equity	8.50% - 11.90%	10.20%
Tax rate	30.10% - 32.40%	31.25%
Cost of debt	4.70% - 4.90%	4.80%
WACC	7.6% - 10.4%	9.0%

WACC

FREIGHT.KL WACC calculation

Category	Low	High

Long-term bond rate	4.2%	4.7%
Equity market risk premium	5.9%	6.9%
Adjusted beta	0.71	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.90%

Tax rate	30.10%	32.40%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.70%	4.90%

After-tax WACC	7.6%	10.4%


Selected WACC	9.0%

FREIGHT.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 FREIGHT.KL:

cost_of_equity (10.20%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.71) + 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.