GLOTEC.KL WACC - Weighted Average Cost of Capital

The WACC of Globaltec Formation Bhd (GLOTEC.KL) is 9.4%.

The Cost of Equity of Globaltec Formation Bhd (GLOTEC.KL) is 10.25%.

The Cost of Debt of Globaltec Formation Bhd (GLOTEC.KL) is 5.45%.

	Range	Selected
Cost of equity	7.70% - 12.80%	10.25%
Tax rate	29.70% - 31.90%	30.80%
Cost of debt	4.50% - 6.40%	5.45%
WACC	7.1% - 11.7%	9.4%

WACC

GLOTEC.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.57	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	12.80%

Tax rate	29.70%	31.90%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.50%	6.40%

After-tax WACC	7.1%	11.7%


Selected WACC	9.4%

GLOTEC.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 GLOTEC.KL:

cost_of_equity (10.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.57) + 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.