GESHEN.KL WACC - Weighted Average Cost of Capital

The WACC of Ge-Shen Corporation Bhd (GESHEN.KL) is 9.4%.

The Cost of Equity of Ge-Shen Corporation Bhd (GESHEN.KL) is 10.50%.

The Cost of Debt of Ge-Shen Corporation Bhd (GESHEN.KL) is 5.25%.

	Range	Selected
Cost of equity	8.60% - 12.40%	10.50%
Tax rate	19.30% - 29.30%	24.30%
Cost of debt	5.20% - 5.30%	5.25%
WACC	7.9% - 11.0%	9.4%

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	0.71	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.40%

Tax rate	19.30%	29.30%
Debt/Equity ratio	0.2	0.2
Cost of debt	5.20%	5.30%

After-tax WACC	7.9%	11.0%


Selected WACC	9.4%

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 (10.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.71) + 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.