MFLOUR.KL WACC - Weighted Average Cost of Capital

The WACC of Malayan Flour Mills Bhd (MFLOUR.KL) is 6.8%.

The Cost of Equity of Malayan Flour Mills Bhd (MFLOUR.KL) is 12.35%.

The Cost of Debt of Malayan Flour Mills Bhd (MFLOUR.KL) is 4.65%.

	Range	Selected
Cost of equity	9.70% - 15.00%	12.35%
Tax rate	27.30% - 34.70%	31.00%
Cost of debt	4.00% - 5.30%	4.65%
WACC	5.6% - 8.0%	6.8%

WACC

MFLOUR.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	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	15.00%

Tax rate	27.30%	34.70%
Debt/Equity ratio	1.54	1.54
Cost of debt	4.00%	5.30%

After-tax WACC	5.6%	8.0%


Selected WACC	6.8%

MFLOUR.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 MFLOUR.KL:

cost_of_equity (12.35%) = 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.