MIECO.KL WACC - Weighted Average Cost of Capital

The WACC of Mieco Chipboard Bhd (MIECO.KL) is 9.1%.

The Cost of Equity of Mieco Chipboard Bhd (MIECO.KL) is 9.05%.

The Cost of Debt of Mieco Chipboard Bhd (MIECO.KL) is 10.85%.

	Range	Selected
Cost of equity	7.70% - 10.40%	9.05%
Tax rate	13.10% - 16.70%	14.90%
Cost of debt	6.10% - 15.60%	10.85%
WACC	7.0% - 11.1%	9.1%

WACC

MIECO.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.57	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.40%

Tax rate	13.10%	16.70%
Debt/Equity ratio	0.35	0.35
Cost of debt	6.10%	15.60%

After-tax WACC	7.0%	11.1%


Selected WACC	9.1%

MIECO.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 MIECO.KL:

cost_of_equity (9.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.57) + 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.