LAYHONG.KL WACC - Weighted Average Cost of Capital

The WACC of Lay Hong Bhd (LAYHONG.KL) is 8.6%.

The Cost of Equity of Lay Hong Bhd (LAYHONG.KL) is 13.20%.

The Cost of Debt of Lay Hong Bhd (LAYHONG.KL) is 4.30%.

	Range	Selected
Cost of equity	11.70% - 14.70%	13.20%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	4.10% - 4.50%	4.30%
WACC	7.7% - 9.5%	8.6%

WACC

LAYHONG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.16	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	14.70%

Tax rate	24.00%	24.00%
Debt/Equity ratio	0.87	0.87
Cost of debt	4.10%	4.50%

After-tax WACC	7.7%	9.5%


Selected WACC	8.6%

LAYHONG.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 LAYHONG.KL:

cost_of_equity (13.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.16) + 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.