METROD.KL WACC - Weighted Average Cost of Capital

The WACC of Metrod Holdings Bhd (METROD.KL) is 7.4%.

The Cost of Equity of Metrod Holdings Bhd (METROD.KL) is 40.60%.

The Cost of Debt of Metrod Holdings Bhd (METROD.KL) is 5.50%.

	Range	Selected
Cost of equity	27.30% - 53.90%	40.60%
Tax rate	16.80% - 40.00%	28.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.7% - 9.2%	7.4%

WACC

METROD.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	3.44	6.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.30%	53.90%

Tax rate	16.80%	40.00%
Debt/Equity ratio	9.03	9.03
Cost of debt	4.00%	7.00%

After-tax WACC	5.7%	9.2%


Selected WACC	7.4%

METROD.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 METROD.KL:

cost_of_equity (40.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (3.44) + 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.