GAMUDA.KL WACC - Weighted Average Cost of Capital

The WACC of Gamuda Bhd (GAMUDA.KL) is 9.4%.

The Cost of Equity of Gamuda Bhd (GAMUDA.KL) is 11.15%.

The Cost of Debt of Gamuda Bhd (GAMUDA.KL) is 6.15%.

	Range	Selected
Cost of equity	9.40% - 12.90%	11.15%
Tax rate	18.70% - 19.80%	19.25%
Cost of debt	4.90% - 7.40%	6.15%
WACC	7.8% - 11.0%	9.4%

WACC

GAMUDA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.81	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.90%

Tax rate	18.70%	19.80%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.90%	7.40%

After-tax WACC	7.8%	11.0%


Selected WACC	9.4%

GAMUDA.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 GAMUDA.KL:

cost_of_equity (11.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.81) + 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.