IJMPLNT.KL WACC - Weighted Average Cost of Capital

The WACC of IJM Plantations Bhd (IJMPLNT.KL) is 10.1%.

The Cost of Equity of IJM Plantations Bhd (IJMPLNT.KL) is 11.85%.

The Cost of Debt of IJM Plantations Bhd (IJMPLNT.KL) is 5.50%.

	Range	Selected
Cost of equity	9.60% - 14.10%	11.85%
Tax rate	26.90% - 36.30%	31.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.2% - 12.1%	10.1%

WACC

IJMPLNT.KL WACC calculation

Category	Low	High

Long-term bond rate	4.2%	4.7%
Equity market risk premium	5.9%	6.9%
Adjusted beta	0.9	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	14.10%

Tax rate	26.90%	36.30%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.00%	7.00%

After-tax WACC	8.2%	12.1%


Selected WACC	10.1%

IJMPLNT.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 IJMPLNT.KL:

cost_of_equity (11.85%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.9) + 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.