IQGROUP.KL WACC - Weighted Average Cost of Capital

The WACC of IQ Group Holdings Bhd (IQGROUP.KL) is 11.5%.

The Cost of Equity of IQ Group Holdings Bhd (IQGROUP.KL) is 12.25%.

The Cost of Debt of IQ Group Holdings Bhd (IQGROUP.KL) is 5.60%.

	Range	Selected
Cost of equity	10.60% - 13.90%	12.25%
Tax rate	16.30% - 20.10%	18.20%
Cost of debt	4.20% - 7.00%	5.60%
WACC	9.9% - 13.1%	11.5%

WACC

IQGROUP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	13.90%

Tax rate	16.30%	20.10%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.20%	7.00%

After-tax WACC	9.9%	13.1%


Selected WACC	11.5%

IQGROUP.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 IQGROUP.KL:

cost_of_equity (12.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1) + 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.