IOICORP.KL WACC - Weighted Average Cost of Capital

The WACC of IOI Corporation Bhd (IOICORP.KL) is 9.4%.

The Cost of Equity of IOI Corporation Bhd (IOICORP.KL) is 10.45%.

The Cost of Debt of IOI Corporation Bhd (IOICORP.KL) is 4.35%.

	Range	Selected
Cost of equity	9.40% - 11.50%	10.45%
Tax rate	23.00% - 25.30%	24.15%
Cost of debt	4.00% - 4.70%	4.35%
WACC	8.5% - 10.3%	9.4%

WACC

IOICORP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.82	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	11.50%

Tax rate	23.00%	25.30%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.00%	4.70%

After-tax WACC	8.5%	10.3%


Selected WACC	9.4%

IOICORP.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 IOICORP.KL:

cost_of_equity (10.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.82) + 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.