The WACC of Kpower Bhd (KPOWER.KL) is 9.2%.
| Range | Selected | |
| Cost of equity | 8.80% - 12.00% | 10.40% |
| Tax rate | 15.60% - 26.80% | 21.20% |
| Cost of debt | 4.90% - 9.60% | 7.25% |
| WACC | 7.7% - 10.7% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 0.77 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.80% | 12.00% |
| Tax rate | 15.60% | 26.80% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 4.90% | 9.60% |
| After-tax WACC | 7.7% | 10.7% |
| Selected WACC | 9.2% | |
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 KPOWER.KL:
cost_of_equity (10.40%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.77) + 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.