MRCB.KL WACC - Weighted Average Cost of Capital

The WACC of Malaysian Resources Corporation Bhd (MRCB.KL) is 5.5%.

The Cost of Equity of Malaysian Resources Corporation Bhd (MRCB.KL) is 8.00%.

The Cost of Debt of Malaysian Resources Corporation Bhd (MRCB.KL) is 6.50%.

	Range	Selected
Cost of equity	6.60% - 9.40%	8.00%
Tax rate	31.30% - 47.50%	39.40%
Cost of debt	4.00% - 9.00%	6.50%
WACC	4.3% - 6.6%	5.5%

WACC

MRCB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.41	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.40%

Tax rate	31.30%	47.50%
Debt/Equity ratio	1.45	1.45
Cost of debt	4.00%	9.00%

After-tax WACC	4.3%	6.6%


Selected WACC	5.5%

MRCB.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 MRCB.KL:

cost_of_equity (8.00%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.41) + 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.