MFCB.KL WACC - Weighted Average Cost of Capital

The WACC of Mega First Corporation Bhd (MFCB.KL) is 10.3%.

The Cost of Equity of Mega First Corporation Bhd (MFCB.KL) is 12.20%.

The Cost of Debt of Mega First Corporation Bhd (MFCB.KL) is 4.65%.

	Range	Selected
Cost of equity	9.70% - 14.70%	12.20%
Tax rate	3.00% - 3.30%	3.15%
Cost of debt	4.50% - 4.80%	4.65%
WACC	8.4% - 12.3%	10.3%

WACC

MFCB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.86	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	14.70%

Tax rate	3.00%	3.30%
Debt/Equity ratio	0.32	0.32
Cost of debt	4.50%	4.80%

After-tax WACC	8.4%	12.3%


Selected WACC	10.3%

MFCB.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 MFCB.KL:

cost_of_equity (12.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.86) + 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.