PARAMON.KL WACC - Weighted Average Cost of Capital

The WACC of Paramount Corporation Bhd (PARAMON.KL) is 6.2%.

The Cost of Equity of Paramount Corporation Bhd (PARAMON.KL) is 9.85%.

The Cost of Debt of Paramount Corporation Bhd (PARAMON.KL) is 5.60%.

	Range	Selected
Cost of equity	8.80% - 10.90%	9.85%
Tax rate	27.90% - 32.80%	30.35%
Cost of debt	5.50% - 5.70%	5.60%
WACC	5.9% - 6.6%	6.2%

WACC

PARAMON.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.72	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	10.90%

Tax rate	27.90%	32.80%
Debt/Equity ratio	1.55	1.55
Cost of debt	5.50%	5.70%

After-tax WACC	5.9%	6.6%


Selected WACC	6.2%

PARAMON.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 PARAMON.KL:

cost_of_equity (9.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.72) + 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.