NAIM.KL WACC - Weighted Average Cost of Capital

The WACC of Naim Holdings Bhd (NAIM.KL) is 11.0%.

The Cost of Equity of Naim Holdings Bhd (NAIM.KL) is 12.55%.

The Cost of Debt of Naim Holdings Bhd (NAIM.KL) is 4.25%.

	Range	Selected
Cost of equity	10.80% - 14.30%	12.55%
Tax rate	18.90% - 19.70%	19.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.5% - 12.5%	11.0%

WACC

NAIM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.02	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	14.30%

Tax rate	18.90%	19.70%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.00%	4.50%

After-tax WACC	9.5%	12.5%


Selected WACC	11.0%

NAIM.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 NAIM.KL:

cost_of_equity (12.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.02) + 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.