MELEWAR.KL WACC - Weighted Average Cost of Capital

The WACC of Melewar Industrial Group Bhd (MELEWAR.KL) is 7.9%.

The Cost of Equity of Melewar Industrial Group Bhd (MELEWAR.KL) is 11.75%.

The Cost of Debt of Melewar Industrial Group Bhd (MELEWAR.KL) is 7.55%.

	Range	Selected
Cost of equity	9.40% - 14.10%	11.75%
Tax rate	18.40% - 19.70%	19.05%
Cost of debt	6.10% - 9.00%	7.55%
WACC	6.4% - 9.4%	7.9%

WACC

MELEWAR.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	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	14.10%

Tax rate	18.40%	19.70%
Debt/Equity ratio	2.18	2.18
Cost of debt	6.10%	9.00%

After-tax WACC	6.4%	9.4%


Selected WACC	7.9%

MELEWAR.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 MELEWAR.KL:

cost_of_equity (11.75%) = 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.