The WACC of MMAG Holdings Bhd (MMAG.KL) is 11.8%.
| Range | Selected | |
| Cost of equity | 14.70% - 21.20% | 17.95% |
| Tax rate | 1.50% - 2.70% | 2.10% |
| Cost of debt | 6.00% - 15.60% | 10.80% |
| WACC | 7.4% - 16.2% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 1.59 | 2.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.70% | 21.20% |
| Tax rate | 1.50% | 2.70% |
| Debt/Equity ratio | 4.8 | 4.8 |
| Cost of debt | 6.00% | 15.60% |
| After-tax WACC | 7.4% | 16.2% |
| Selected WACC | 11.8% | |
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 MMAG.KL:
cost_of_equity (17.95%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.59) + 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.