The WACC of iDimension Consolidated Bhd (IDMENSN.KL) is 12.8%.
| Range | Selected | |
| Cost of equity | 11.60% - 15.70% | 13.65% |
| Tax rate | 1.00% - 2.40% | 1.70% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 11.0% - 14.6% | 12.8% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 1.24 | 1.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.60% | 15.70% |
| Tax rate | 1.00% | 2.40% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 11.0% | 14.6% |
| Selected WACC | 12.8% | |
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 IDMENSN.KL:
cost_of_equity (13.65%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (1.24) + 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.