GCB.KL WACC - Weighted Average Cost of Capital
The WACC of Guan Chong Bhd (GCB.KL) is 8.7%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.2% | 9.65% |
| Tax rate | 19.5% - 21.4% | 20.45% |
| Cost of debt | 6.9% - 10.7% | 8.8% |
| WACC | 7.2% - 10.2% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.63 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.2% |
| Tax rate | 19.5% | 21.4% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 6.9% | 10.7% |
| After-tax WACC | 7.2% | 10.2% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GCB.KL | Guan Chong Bhd | 0.53 | 1.66 | 1.17 |
| 3A.KL | Three-A Resources Bhd | 0.01 | 0.2 | 0.2 |
| AJI.KL | Ajinomoto Malaysia Bhd | 0.07 | 0.58 | 0.55 |
| BEW.SI | JB Foods Ltd | 2.56 | -0.11 | -0.04 |
| CANONE.KL | Can-One Bhd | 4.08 | 0.63 | 0.15 |
| CIHLDG.KL | CI Holdings Bhd | 0.77 | 0.48 | 0.3 |
| DLADY.KL | Dutch Lady Milk Industries Bhd | 0.01 | 0.48 | 0.48 |
| JOHOTIN.KL | Johore Tin Bhd | 0.09 | 0.79 | 0.74 |
| MFLOUR.KL | Malayan Flour Mills Bhd | 1.58 | 0.73 | 0.33 |
| MSM.KL | MSM Malaysia Holdings Bhd | 1.14 | 1.55 | 0.82 |
| Low | High | |
| Unlevered beta | 0.32 | 0.51 |
| Relevered beta | 0.45 | 0.72 |
| Adjusted relevered beta | 0.63 | 0.81 |
GCB.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 GCB.KL:
cost_of_equity (9.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.63) + 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.