PA.KL WACC - Weighted Average Cost of Capital

The WACC of PA Resources Bhd (PA.KL) is 12.3%.

The Cost of Equity of PA Resources Bhd (PA.KL) is 12.70%.

The Cost of Debt of PA Resources Bhd (PA.KL) is 5.20%.

	Range	Selected
Cost of equity	11.30% - 14.10%	12.70%
Tax rate	20.80% - 26.20%	23.50%
Cost of debt	4.40% - 6.00%	5.20%
WACC	11.0% - 13.7%	12.3%

WACC

PA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.09	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.10%

Tax rate	20.80%	26.20%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.40%	6.00%

After-tax WACC	11.0%	13.7%


Selected WACC	12.3%

PA.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 PA.KL:

cost_of_equity (12.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.09) + 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.