KLCC.KL WACC - Weighted Average Cost of Capital

The WACC of KLCCP Stapled Group (KLCC.KL) is 7.0%.

The Cost of Equity of KLCCP Stapled Group (KLCC.KL) is 7.75%.

The Cost of Debt of KLCCP Stapled Group (KLCC.KL) is 4.85%.

	Range	Selected
Cost of equity	6.90% - 8.60%	7.75%
Tax rate	10.40% - 11.10%	10.75%
Cost of debt	4.80% - 4.90%	4.85%
WACC	6.3% - 7.7%	7.0%

WACC

KLCC.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.45	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	8.60%

Tax rate	10.40%	11.10%
Debt/Equity ratio	0.28	0.28
Cost of debt	4.80%	4.90%

After-tax WACC	6.3%	7.7%


Selected WACC	7.0%

KLCC.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 KLCC.KL:

cost_of_equity (7.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.45) + 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.