KPS.KL WACC - Weighted Average Cost of Capital

The WACC of Kumpulan Perangsang Selangor Bhd (KPS.KL) is 7.1%.

The Cost of Equity of Kumpulan Perangsang Selangor Bhd (KPS.KL) is 8.30%.

The Cost of Debt of Kumpulan Perangsang Selangor Bhd (KPS.KL) is 8.15%.

	Range	Selected
Cost of equity	6.70% - 9.90%	8.30%
Tax rate	29.90% - 43.50%	36.70%
Cost of debt	4.00% - 12.30%	8.15%
WACC	5.3% - 8.9%	7.1%

WACC

KPS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.42	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.90%

Tax rate	29.90%	43.50%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.00%	12.30%

After-tax WACC	5.3%	8.9%


Selected WACC	7.1%

KPS.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 KPS.KL:

cost_of_equity (8.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.42) + 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.