MAGNUM.KL
Magnum Bhd
Price:  
1.37 
MYR
Volume:  
616,000.00
Malaysia | Hotels, Restaurants & Leisure
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MAGNUM.KL WACC - Weighted Average Cost of Capital

The WACC of Magnum Bhd (MAGNUM.KL) is 7.5%.

The Cost of Equity of Magnum Bhd (MAGNUM.KL) is 8.95%.
The Cost of Debt of Magnum Bhd (MAGNUM.KL) is 4.80%.

Range Selected
Cost of equity 7.40% - 10.50% 8.95%
Tax rate 24.00% - 24.00% 24.00%
Cost of debt 4.70% - 4.90% 4.80%
WACC 6.4% - 8.7% 7.5%
WACC

MAGNUM.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.53 0.73
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.50%
Tax rate 24.00% 24.00%
Debt/Equity ratio 0.37 0.37
Cost of debt 4.70% 4.90%
After-tax WACC 6.4% 8.7%
Selected WACC 7.5%

MAGNUM.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 MAGNUM.KL:

cost_of_equity (8.95%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.53) + 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.