MCEMENT.KL WACC - Weighted Average Cost of Capital
The WACC of Malayan Cement Bhd (MCEMENT.KL) is 7.9%.
| Range | Selected | |
| Cost of equity | 5.7% - 13.2% | 9.45% |
| Tax rate | 27.2% - 34.8% | 31% |
| Cost of debt | 4.9% - 8.7% | 6.8% |
| WACC | 5.0% - 10.8% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.28 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 13.2% |
| Tax rate | 27.2% | 34.8% |
| Debt/Equity ratio | 0.47 | 0.47 |
| Cost of debt | 4.9% | 8.7% |
| After-tax WACC | 5.0% | 10.8% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MCEMENT.KL | Malayan Cement Bhd | 0.47 | 1.18 | 0.9 |
| 8427.HK | SK Target Group Ltd | 0.02 | -1.34 | -1.32 |
| BIG.KL | BIG Industries Bhd | 0.08 | 1.08 | 1.02 |
| CEPCO.KL | Concrete Engineering Products Bhd | 0.16 | -0.27 | -0.24 |
| CMSB.KL | Cahya Mata Sarawak Bhd | 0.19 | 1.89 | 1.68 |
| DFCITY.KL | Dfcity Group Bhd | 0.32 | -0.52 | -0.43 |
| HUMEIND.KL | Hume Cement Industries Bhd | 0.15 | 1.23 | 1.11 |
| JADEM.KL | Jade Marvel Group Bhd | 0.06 | -0.45 | -0.43 |
| KIALIM.KL | Kia Lim Bhd | 0.07 | 0.07 | 0.07 |
| QUALITY.KL | Quality Concrete Holdings Bhd | 1.64 | 1.67 | 0.8 |
| Low | High | |
| Unlevered beta | -0.06 | 0.84 |
| Relevered beta | -0.07 | 1.1 |
| Adjusted relevered beta | 0.28 | 1.07 |
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 (9.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.28) + 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.