NAIM.KL WACC - Weighted Average Cost of Capital

The WACC of Naim Holdings Bhd (NAIM.KL) is 9.3%.

The Cost of Equity of Naim Holdings Bhd (NAIM.KL) is 10.60%.

The Cost of Debt of Naim Holdings Bhd (NAIM.KL) is 5.50%.

	Range	Selected
Cost of equity	9.40% - 11.80%	10.60%
Tax rate	18.70% - 19.10%	18.90%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.1% - 10.4%	9.3%

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	0.82	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	11.80%

Tax rate	18.70%	19.10%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.00%	7.00%

After-tax WACC	8.1%	10.4%


Selected WACC	9.3%

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 (10.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.82) + 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.