MCEHLDG.KL WACC - Weighted Average Cost of Capital

The WACC of Mce Holdings Bhd (MCEHLDG.KL) is 10.0%.

The Cost of Equity of Mce Holdings Bhd (MCEHLDG.KL) is 10.50%.

The Cost of Debt of Mce Holdings Bhd (MCEHLDG.KL) is 4.60%.

	Range	Selected
Cost of equity	9.30% - 11.70%	10.50%
Tax rate	9.40% - 14.70%	12.05%
Cost of debt	4.40% - 4.80%	4.60%
WACC	8.9% - 11.1%	10.0%

WACC

MCEHLDG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.8	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	11.70%

Tax rate	9.40%	14.70%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.40%	4.80%

After-tax WACC	8.9%	11.1%


Selected WACC	10.0%

MCEHLDG.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 MCEHLDG.KL:

cost_of_equity (10.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.8) + 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.