The WACC of K-Star Sports Ltd (KSTAR.KL) is 10.2%.
| Range | Selected | |
| Cost of equity | 9.90% - 13.20% | 11.55% |
| Tax rate | 0.70% - 1.30% | 1.00% |
| Cost of debt | 7.00% - 8.10% | 7.55% |
| WACC | 8.9% - 11.5% | 10.2% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 0.95 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.90% | 13.20% |
| Tax rate | 0.70% | 1.30% |
| Debt/Equity ratio | 0.49 | 0.49 |
| Cost of debt | 7.00% | 8.10% |
| After-tax WACC | 8.9% | 11.5% |
| Selected WACC | 10.2% | |
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 KSTAR.KL:
cost_of_equity (11.55%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.95) + 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.