LCTITAN.KL WACC - Weighted Average Cost of Capital

The WACC of Lotte Chemical Titan Holding Bhd (LCTITAN.KL) is 63.9%.

The Cost of Equity of Lotte Chemical Titan Holding Bhd (LCTITAN.KL) is 18.50%.

The Cost of Debt of Lotte Chemical Titan Holding Bhd (LCTITAN.KL) is 90.40%.

	Range	Selected
Cost of equity	10.10% - 26.90%	18.50%
Tax rate	20.60% - 22.90%	21.75%
Cost of debt	7.00% - 173.80%	90.40%
WACC	6.1% - 121.7%	63.9%

WACC

LCTITAN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.92	2.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	26.90%

Tax rate	20.60%	22.90%
Debt/Equity ratio	7.8	7.8
Cost of debt	7.00%	173.80%

After-tax WACC	6.1%	121.7%


Selected WACC	63.9%

LCTITAN.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 LCTITAN.KL:

cost_of_equity (18.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.92) + 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.