The WACC of ICT Zone Asia Bhd (ICTZONE.KL) is 6.7%.
Range | Selected | |
Cost of equity | 6.5% - 10.7% | 8.6% |
Tax rate | 27.4% - 31.4% | 29.4% |
Cost of debt | 6.0% - 6.4% | 6.2% |
WACC | 5.5% - 7.8% | 6.7% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.4 | 0.76 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 10.7% |
Tax rate | 27.4% | 31.4% |
Debt/Equity ratio | 0.85 | 0.85 |
Cost of debt | 6.0% | 6.4% |
After-tax WACC | 5.5% | 7.8% |
Selected WACC | 6.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ICTZONE.KL | ICT Zone Asia Bhd | 0.85 | -0.58 | -0.36 |
ARTNIRMAN.NS | Art Nirman Ltd | 0.03 | 1.05 | 1.03 |
ASTRA.KL | Astramina Group Berhad | 0.21 | 1.35 | 1.18 |
DREIT.BK | Dusit Thani Freehold and Leasehold Real Estate Investment Trust | 0.6 | 0.27 | 0.19 |
JISHAN.KL | Jishan Bhd | 0.6 | 0.11 | 0.08 |
MYKRIS.KL | Mykris International Bhd | 0.04 | 0.96 | 0.94 |
PURI.JK | Puri Global Sukses Tbk PT | 0.6 | 1.01 | 0.71 |
SPRING.KL | Spring Art Holdings Bhd | 0.22 | -0.13 | -0.11 |
VNI.VN | Viet Nam Land Investment Corp | 1.35 | -0.15 | -0.08 |
Low | High | |
Unlevered beta | 0.1 | 0.61 |
Relevered beta | 0.1 | 0.64 |
Adjusted relevered beta | 0.4 | 0.76 |
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 ICTZONE.KL:
cost_of_equity (8.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.