The WACC of Paos Holdings Bhd (PAOS.KL) is 8.0%.
Range | Selected | |
Cost of equity | 6.9% - 9.2% | 8.05% |
Tax rate | 24.0% - 24.0% | 24% |
Cost of debt | 7.0% - 7.8% | 7.4% |
WACC | 6.9% - 9.2% | 8.0% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.45 | 0.57 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.9% | 9.2% |
Tax rate | 24.0% | 24.0% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 7.0% | 7.8% |
After-tax WACC | 6.9% | 9.2% |
Selected WACC | 8.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PAOS.KL | Paos Holdings Bhd | 0.01 | 0.99 | 0.98 |
004540.KS | Kleannara Co Ltd | 3.61 | 0.69 | 0.18 |
065950.KQ | Welcron Co Ltd | 2.83 | 0.55 | 0.17 |
1730.TW | Farcent Enterprise Co Ltd | 0 | 0.18 | 0.18 |
2023.HK | China Ludao Technology Company Ltd | 1.98 | -0.17 | -0.07 |
7818.T | Transaction Co Ltd | 0.01 | -0.1 | -0.1 |
8512.HK | Hyfusin Group Holdings Ltd | 0.06 | 0.62 | 0.59 |
NET.VN | NET Detergent JSC | 0.08 | 0.72 | 0.68 |
NTPM.KL | NTPM Holdings Bhd | 1.15 | 0.36 | 0.19 |
RUBEREX.KL | Rubberex Corporation M Bhd | 0.02 | 1.5 | 1.47 |
Low | High | |
Unlevered beta | 0.18 | 0.35 |
Relevered beta | 0.18 | 0.36 |
Adjusted relevered beta | 0.45 | 0.57 |
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 PAOS.KL:
cost_of_equity (8.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.45) + 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.