GFM.KL WACC - Weighted Average Cost of Capital

The WACC of Gfm Services Bhd (GFM.KL) is 7.5%.

The Cost of Equity of Gfm Services Bhd (GFM.KL) is 15.35%.

The Cost of Debt of Gfm Services Bhd (GFM.KL) is 6.25%.

	Range	Selected
Cost of equity	12.60% - 18.10%	15.35%
Tax rate	40.80% - 43.80%	42.30%
Cost of debt	6.00% - 6.50%	6.25%
WACC	6.5% - 8.4%	7.5%

WACC

GFM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.29	1.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	18.10%

Tax rate	40.80%	43.80%
Debt/Equity ratio	2.05	2.05
Cost of debt	6.00%	6.50%

After-tax WACC	6.5%	8.4%


Selected WACC	7.5%

GFM.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 GFM.KL:

cost_of_equity (15.35%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.29) + 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.