OPTIMAX.KL WACC - Weighted Average Cost of Capital

The WACC of Optimax Holdings Sdn Bhd (OPTIMAX.KL) is 7.8%.

The Cost of Equity of Optimax Holdings Sdn Bhd (OPTIMAX.KL) is 8.70%.

The Cost of Debt of Optimax Holdings Sdn Bhd (OPTIMAX.KL) is 5.25%.

	Range	Selected
Cost of equity	6.80% - 10.60%	8.70%
Tax rate	29.20% - 29.80%	29.50%
Cost of debt	4.70% - 5.80%	5.25%
WACC	6.2% - 9.4%	7.8%

WACC

OPTIMAX.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.44	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.60%

Tax rate	29.20%	29.80%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.70%	5.80%

After-tax WACC	6.2%	9.4%


Selected WACC	7.8%

OPTIMAX.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 OPTIMAX.KL:

cost_of_equity (8.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.44) + 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.