MEDIA.KL WACC - Weighted Average Cost of Capital

The WACC of Media Prima Bhd (MEDIA.KL) is 7.2%.

The Cost of Equity of Media Prima Bhd (MEDIA.KL) is 11.50%.

The Cost of Debt of Media Prima Bhd (MEDIA.KL) is 6.40%.

	Range	Selected
Cost of equity	9.30% - 13.70%	11.50%
Tax rate	39.30% - 41.30%	40.30%
Cost of debt	5.40% - 7.40%	6.40%
WACC	6.0% - 8.5%	7.2%

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	0.81	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	13.70%

Tax rate	39.30%	41.30%
Debt/Equity ratio	1.26	1.26
Cost of debt	5.40%	7.40%

After-tax WACC	6.0%	8.5%


Selected WACC	7.2%

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 (11.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.81) + 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.