MSC.KL WACC - Weighted Average Cost of Capital

The WACC of Malaysia Smelting Corporation Bhd (MSC.KL) is 10.1%.

The Cost of Equity of Malaysia Smelting Corporation Bhd (MSC.KL) is 12.60%.

The Cost of Debt of Malaysia Smelting Corporation Bhd (MSC.KL) is 4.70%.

	Range	Selected
Cost of equity	11.10% - 14.10%	12.60%
Tax rate	26.00% - 28.40%	27.20%
Cost of debt	4.70% - 4.70%	4.70%
WACC	9.0% - 11.2%	10.1%

WACC

MSC.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.06	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.10%

Tax rate	26.00%	28.40%
Debt/Equity ratio	0.37	0.37
Cost of debt	4.70%	4.70%

After-tax WACC	9.0%	11.2%


Selected WACC	10.1%

MSC.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 MSC.KL:

cost_of_equity (12.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.06) + 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.