GUOCO.KL WACC - Weighted Average Cost of Capital
The WACC of GuocoLand (Malaysia) Bhd (GUOCO.KL) is 6.1%.
| Range | Selected | |
| Cost of equity | 8.4% - 10.1% | 9.25% |
| Tax rate | 31.0% - 36.3% | 33.65% |
| Cost of debt | 4.0% - 6.0% | 5% |
| WACC | 5.4% - 6.8% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.67 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 10.1% |
| Tax rate | 31.0% | 36.3% |
| Debt/Equity ratio | 1.11 | 1.11 |
| Cost of debt | 4.0% | 6.0% |
| After-tax WACC | 5.4% | 6.8% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GUOCO.KL | GuocoLand (Malaysia) Bhd | 1.11 | 0.52 | 0.29 |
| E&O.KL | Eastern & Oriental Bhd | 0.78 | 1.11 | 0.72 |
| ECOFIRS.KL | EcoFirst Consolidated Bhd | 0.67 | 0.3 | 0.2 |
| HCK.KL | HCK Capital Group Bhd | 0.22 | 0.34 | 0.3 |
| IBHD.KL | I-Bhd | 0.67 | 0.61 | 0.42 |
| MAXIM.KL | Maxim Global Bhd | 1.2 | -0.98 | -0.53 |
| PARAMON.KL | Paramount Corporation Bhd | 1.5 | 0.6 | 0.3 |
| SHL.KL | SHL Consolidated Bhd | 0 | 0.28 | 0.28 |
| SUNWAY.KL | Sunway Bhd | 0.36 | 1.56 | 1.25 |
| UOS.AX | United Overseas Australia Ltd | 0.26 | -0.36 | -0.3 |
| Low | High | |
| Unlevered beta | 0.29 | 0.3 |
| Relevered beta | 0.51 | 0.52 |
| Adjusted relevered beta | 0.67 | 0.68 |
GUOCO.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 GUOCO.KL:
cost_of_equity (9.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.67) + 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.