MPI.KL WACC - Weighted Average Cost of Capital

The WACC of Malaysian Pacific Industries Bhd (MPI.KL) is 11.7%.

The Cost of Equity of Malaysian Pacific Industries Bhd (MPI.KL) is 11.90%.

The Cost of Debt of Malaysian Pacific Industries Bhd (MPI.KL) is 5.25%.

	Range	Selected
Cost of equity	10.50% - 13.30%	11.90%
Tax rate	11.00% - 12.60%	11.80%
Cost of debt	4.40% - 6.10%	5.25%
WACC	10.3% - 13.1%	11.7%

WACC

MPI.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.97	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.30%

Tax rate	11.00%	12.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.40%	6.10%

After-tax WACC	10.3%	13.1%


Selected WACC	11.7%

MPI.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 MPI.KL:

cost_of_equity (11.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.97) + 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.