KFIMA.KL WACC - Weighted Average Cost of Capital

The WACC of Kumpulan Fima Bhd (KFIMA.KL) is 8.8%.

The Cost of Equity of Kumpulan Fima Bhd (KFIMA.KL) is 11.75%.

The Cost of Debt of Kumpulan Fima Bhd (KFIMA.KL) is 4.25%.

	Range	Selected
Cost of equity	8.70% - 14.80%	11.75%
Tax rate	28.00% - 32.60%	30.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.7% - 10.8%	8.8%

WACC

KFIMA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.71	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	14.80%

Tax rate	28.00%	32.60%
Debt/Equity ratio	0.51	0.51
Cost of debt	4.00%	4.50%

After-tax WACC	6.7%	10.8%


Selected WACC	8.8%

KFIMA.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 KFIMA.KL:

cost_of_equity (11.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.71) + 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.