LTKM.KL WACC - Weighted Average Cost of Capital

The WACC of LTKM Bhd (LTKM.KL) is 10.9%.

The Cost of Equity of LTKM Bhd (LTKM.KL) is 13.60%.

The Cost of Debt of LTKM Bhd (LTKM.KL) is 4.55%.

	Range	Selected
Cost of equity	11.80% - 15.40%	13.60%
Tax rate	13.30% - 22.50%	17.90%
Cost of debt	4.40% - 4.70%	4.55%
WACC	9.6% - 12.1%	10.9%

WACC

LTKM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.17	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	15.40%

Tax rate	13.30%	22.50%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.40%	4.70%

After-tax WACC	9.6%	12.1%


Selected WACC	10.9%

LTKM.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 LTKM.KL:

cost_of_equity (13.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.17) + 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.