The WACC of Genetec Technology Bhd (GENETEC.KL) is 13.0%.
| Range | Selected | |
| Cost of equity | 11.60% - 14.80% | 13.20% |
| Tax rate | 8.10% - 9.20% | 8.65% |
| Cost of debt | 4.40% - 4.90% | 4.65% |
| WACC | 11.4% - 14.6% | 13.0% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 1.14 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.60% | 14.80% |
| Tax rate | 8.10% | 9.20% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.40% | 4.90% |
| After-tax WACC | 11.4% | 14.6% |
| Selected WACC | 13.0% | |
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 GENETEC.KL:
cost_of_equity (13.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.14) + 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.