GADANG.KL WACC - Weighted Average Cost of Capital

The WACC of Gadang Holdings Bhd (GADANG.KL) is 8.7%.

The Cost of Equity of Gadang Holdings Bhd (GADANG.KL) is 13.60%.

The Cost of Debt of Gadang Holdings Bhd (GADANG.KL) is 5.70%.

	Range	Selected
Cost of equity	11.90% - 15.30%	13.60%
Tax rate	39.80% - 43.00%	41.40%
Cost of debt	4.00% - 7.40%	5.70%
WACC	7.4% - 10.0%	8.7%

WACC

GADANG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.19	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	15.30%

Tax rate	39.80%	43.00%
Debt/Equity ratio	0.9	0.9
Cost of debt	4.00%	7.40%

After-tax WACC	7.4%	10.0%


Selected WACC	8.7%

GADANG.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 GADANG.KL:

cost_of_equity (13.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.19) + 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.