GESHEN.KL WACC - Weighted Average Cost of Capital

The WACC of Ge-Shen Corporation Bhd (GESHEN.KL) is 9.3%.

The Cost of Equity of Ge-Shen Corporation Bhd (GESHEN.KL) is 10.35%.

The Cost of Debt of Ge-Shen Corporation Bhd (GESHEN.KL) is 4.95%.

	Range	Selected
Cost of equity	7.80% - 12.90%	10.35%
Tax rate	17.20% - 22.90%	20.05%
Cost of debt	4.70% - 5.20%	4.95%
WACC	7.2% - 11.5%	9.3%

WACC

GESHEN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.59	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	12.90%

Tax rate	17.20%	22.90%
Debt/Equity ratio	0.19	0.19
Cost of debt	4.70%	5.20%

After-tax WACC	7.2%	11.5%


Selected WACC	9.3%

GESHEN.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 GESHEN.KL:

cost_of_equity (10.35%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.59) + 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.