KLUANG.KL WACC - Weighted Average Cost of Capital
The WACC of Kluang Rubber Company (Malaya) Bhd (KLUANG.KL) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.5% - 11.0% | 9.75% |
| Tax rate | 3.7% - 12.8% | 8.25% |
| Cost of debt | 4.4% - 4.9% | 4.65% |
| WACC | 8.5% - 10.9% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.69 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 11.0% |
| Tax rate | 3.7% | 12.8% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.4% | 4.9% |
| After-tax WACC | 8.5% | 10.9% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KLUANG.KL | Kluang Rubber Company (Malaya) Bhd | 0.01 | 0.5 | 0.49 |
| AASIA.KL | Astral Asia Bhd | 0.48 | 0.87 | 0.6 |
| GOPENG.KL | Gopeng Bhd | 0 | -0.24 | -0.24 |
| HARNLEN.KL | Harn Len Corporation Bhd | 0.16 | 1 | 0.87 |
| IOICORP.KL | IOI Corporation Bhd | 0.16 | 1.01 | 0.88 |
| MATANG.KL | Matang Bhd | 0 | 0.55 | 0.55 |
| RSAWIT.KL | Rimbunan Sawit Bhd | 0.65 | 1.29 | 0.8 |
| SBAGAN.KL | Sungei Bagan Rubber Company Malaya Bhd | 0 | 0.52 | 0.52 |
| SHCHAN.KL | Sin Heng Chan (Malaya) Bhd | 2.51 | -0.35 | -0.1 |
| TSH.KL | TSH Resources Bhd | 0.17 | 0.98 | 0.84 |
| Low | High | |
| Unlevered beta | 0.54 | 0.68 |
| Relevered beta | 0.54 | 0.69 |
| Adjusted relevered beta | 0.69 | 0.79 |
KLUANG.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 KLUANG.KL:
cost_of_equity (9.75%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.69) + 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.