MAGNA.KL WACC - Weighted Average Cost of Capital

The WACC of Magna Prima Bhd (MAGNA.KL) is 7.9%.

The Cost of Equity of Magna Prima Bhd (MAGNA.KL) is 7.85%.

The Cost of Debt of Magna Prima Bhd (MAGNA.KL) is 4.60%.

	Range	Selected
Cost of equity	6.20% - 9.50%	7.85%
Tax rate	11.00% - 15.40%	13.20%
Cost of debt	4.40% - 4.80%	4.60%
WACC	6.2% - 9.5%	7.9%

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	0.36	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.50%

Tax rate	11.00%	15.40%
Debt/Equity ratio	0	0
Cost of debt	4.40%	4.80%

After-tax WACC	6.2%	9.5%


Selected WACC	7.9%

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 (7.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.36) + 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.