MFLOUR.KL WACC - Weighted Average Cost of Capital

The WACC of Malayan Flour Mills Bhd (MFLOUR.KL) is 6.2%.

The Cost of Equity of Malayan Flour Mills Bhd (MFLOUR.KL) is 11.10%.

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

	Range	Selected
Cost of equity	9.30% - 12.90%	11.10%
Tax rate	27.30% - 34.70%	31.00%
Cost of debt	4.00% - 5.30%	4.65%
WACC	5.4% - 7.1%	6.2%

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	0.8	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	12.90%

Tax rate	27.30%	34.70%
Debt/Equity ratio	1.58	1.58
Cost of debt	4.00%	5.30%

After-tax WACC	5.4%	7.1%


Selected WACC	6.2%

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 (11.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.8) + 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.