MEDIA.KL WACC - Weighted Average Cost of Capital

The WACC of Media Prima Bhd (MEDIA.KL) is 7.5%.

The Cost of Equity of Media Prima Bhd (MEDIA.KL) is 10.70%.

The Cost of Debt of Media Prima Bhd (MEDIA.KL) is 6.20%.

	Range	Selected
Cost of equity	8.40% - 13.00%	10.70%
Tax rate	41.50% - 42.30%	41.90%
Cost of debt	5.50% - 6.90%	6.20%
WACC	6.0% - 8.9%	7.5%

WACC

MEDIA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.67	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	13.00%

Tax rate	41.50%	42.30%
Debt/Equity ratio	0.84	0.84
Cost of debt	5.50%	6.90%

After-tax WACC	6.0%	8.9%


Selected WACC	7.5%

MEDIA.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 MEDIA.KL:

cost_of_equity (10.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.67) + 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.