GPHAROS.KL WACC - Weighted Average Cost of Capital

The WACC of Golden Pharos Bhd (GPHAROS.KL) is 7.3%.

The Cost of Equity of Golden Pharos Bhd (GPHAROS.KL) is 8.15%.

The Cost of Debt of Golden Pharos Bhd (GPHAROS.KL) is 5.50%.

	Range	Selected
Cost of equity	7.00% - 9.30%	8.15%
Tax rate	11.10% - 17.50%	14.30%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 8.4%	7.3%

WACC

GPHAROS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.47	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	9.30%

Tax rate	11.10%	17.50%
Debt/Equity ratio	0.32	0.32
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	8.4%


Selected WACC	7.3%

GPHAROS.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 GPHAROS.KL:

cost_of_equity (8.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.47) + 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.