MAGNA.KL WACC - Weighted Average Cost of Capital

The WACC of Magna Prima Bhd (MAGNA.KL) is 8.8%.

The Cost of Equity of Magna Prima Bhd (MAGNA.KL) is 8.80%.

The Cost of Debt of Magna Prima Bhd (MAGNA.KL) is 4.95%.

	Range	Selected
Cost of equity	6.80% - 10.80%	8.80%
Tax rate	10.40% - 14.30%	12.35%
Cost of debt	4.40% - 5.50%	4.95%
WACC	6.8% - 10.8%	8.8%

WACC

MAGNA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.44	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.80%

Tax rate	10.40%	14.30%
Debt/Equity ratio	0	0
Cost of debt	4.40%	5.50%

After-tax WACC	6.8%	10.8%


Selected WACC	8.8%

MAGNA.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 MAGNA.KL:

cost_of_equity (8.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.44) + 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.