LBS.KL WACC - Weighted Average Cost of Capital

The WACC of Lbs Bina Group Bhd (LBS.KL) is 8.6%.

The Cost of Equity of Lbs Bina Group Bhd (LBS.KL) is 13.55%.

The Cost of Debt of Lbs Bina Group Bhd (LBS.KL) is 5.60%.

	Range	Selected
Cost of equity	11.60% - 15.50%	13.55%
Tax rate	33.30% - 34.60%	33.95%
Cost of debt	4.90% - 6.30%	5.60%
WACC	7.4% - 9.8%	8.6%

WACC

LBS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.15	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	15.50%

Tax rate	33.30%	34.60%
Debt/Equity ratio	1	1
Cost of debt	4.90%	6.30%

After-tax WACC	7.4%	9.8%


Selected WACC	8.6%

LBS.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 LBS.KL:

cost_of_equity (13.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.15) + 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.