MCEMENT.KL WACC - Weighted Average Cost of Capital

The WACC of Malayan Cement Bhd (MCEMENT.KL) is 8.4%.

The Cost of Equity of Malayan Cement Bhd (MCEMENT.KL) is 10.15%.

The Cost of Debt of Malayan Cement Bhd (MCEMENT.KL) is 6.80%.

	Range	Selected
Cost of equity	6.50% - 13.80%	10.15%
Tax rate	27.20% - 34.80%	31.00%
Cost of debt	4.90% - 8.70%	6.80%
WACC	5.6% - 11.2%	8.4%

WACC

MCEMENT.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.4	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	13.80%

Tax rate	27.20%	34.80%
Debt/Equity ratio	0.48	0.48
Cost of debt	4.90%	8.70%

After-tax WACC	5.6%	11.2%


Selected WACC	8.4%

MCEMENT.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 MCEMENT.KL:

cost_of_equity (10.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.