PERSTIM.KL WACC - Weighted Average Cost of Capital

The WACC of Perusahaan Sadur Timah Malaysia (PERSTIMA) Bhd (PERSTIM.KL) is 10.9%.

The Cost of Equity of Perusahaan Sadur Timah Malaysia (PERSTIMA) Bhd (PERSTIM.KL) is 15.05%.

The Cost of Debt of Perusahaan Sadur Timah Malaysia (PERSTIMA) Bhd (PERSTIM.KL) is 10.80%.

	Range	Selected
Cost of equity	13.40% - 16.70%	15.05%
Tax rate	31.30% - 37.90%	34.60%
Cost of debt	7.00% - 14.60%	10.80%
WACC	9.1% - 12.8%	10.9%

WACC

PERSTIM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.41	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.70%

Tax rate	31.30%	37.90%
Debt/Equity ratio	1.03	1.03
Cost of debt	7.00%	14.60%

After-tax WACC	9.1%	12.8%


Selected WACC	10.9%

PERSTIM.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 PERSTIM.KL:

cost_of_equity (15.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.41) + 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.