IGBREIT.KL WACC - Weighted Average Cost of Capital
The WACC of IGB Real Estate Investment Trust (IGBREIT.KL) is 7.5%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.0% | 8.05% |
| Tax rate | 24.0% - 24.0% | 24% |
| Cost of debt | 4.7% - 4.7% | 4.7% |
| WACC | 6.7% - 8.4% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.48 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.0% |
| Tax rate | 24.0% | 24.0% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.7% | 4.7% |
| After-tax WACC | 6.7% | 8.4% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IGBREIT.KL | IGB Real Estate Investment Trust | 0.13 | -0.19 | -0.17 |
| AU8U.SI | CapitaLand China Trust | 1.43 | 0.87 | 0.42 |
| CMMT.KL | CapitaLand Malaysia Mall Trust | 1.18 | -0.05 | -0.03 |
| CPNREIT.BK | CPN Retail Growth Leasehold REIT | 1.18 | 0.92 | 0.49 |
| CQR.AX | Charter Hall Retail REIT | 0.47 | 0.27 | 0.2 |
| HEKTAR.KL | Hektar Real Estate Investment Trust | 1.92 | 0.45 | 0.18 |
| KPG.NZ | Kiwi Property Group Ltd | 0.82 | 0.8 | 0.49 |
| PAVREIT.KL | Pavilion Real Estate Investment Trust | 0.55 | 0.41 | 0.29 |
| SUNREIT.KL | Sunway Real Estate Investment Trust | 0.61 | 0.39 | 0.27 |
| WPR.AX | Waypoint REIT Ltd | 0.56 | 0.3 | 0.21 |
| Low | High | |
| Unlevered beta | 0.2 | 0.28 |
| Relevered beta | 0.22 | 0.3 |
| Adjusted relevered beta | 0.48 | 0.53 |
IGBREIT.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 IGBREIT.KL:
cost_of_equity (8.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.48) + 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.