IOIPG.KL WACC - Weighted Average Cost of Capital

The WACC of IOI Properties Group Bhd (IOIPG.KL) is 7.9%.

The Cost of Equity of IOI Properties Group Bhd (IOIPG.KL) is 11.70%.

The Cost of Debt of IOI Properties Group Bhd (IOIPG.KL) is 4.75%.

	Range	Selected
Cost of equity	10.20% - 13.20%	11.70%
Tax rate	21.30% - 30.90%	26.10%
Cost of debt	4.20% - 5.30%	4.75%
WACC	7.1% - 8.8%	7.9%

WACC

IOIPG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.94	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.20%

Tax rate	21.30%	30.90%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.20%	5.30%

After-tax WACC	7.1%	8.8%


Selected WACC	7.9%

IOIPG.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 IOIPG.KL:

cost_of_equity (11.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.94) + 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.