PESTECH.KL WACC - Weighted Average Cost of Capital

The WACC of PESTECH International Bhd (PESTECH.KL) is 9.1%.

The Cost of Equity of PESTECH International Bhd (PESTECH.KL) is 12.40%.

The Cost of Debt of PESTECH International Bhd (PESTECH.KL) is 8.10%.

	Range	Selected
Cost of equity	6.40% - 18.40%	12.40%
Tax rate	2.80% - 4.40%	3.60%
Cost of debt	7.00% - 9.20%	8.10%
WACC	6.7% - 11.5%	9.1%

WACC

PESTECH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.39	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	18.40%

Tax rate	2.80%	4.40%
Debt/Equity ratio	2.56	2.56
Cost of debt	7.00%	9.20%

After-tax WACC	6.7%	11.5%


Selected WACC	9.1%

PESTECH.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 PESTECH.KL:

cost_of_equity (12.40%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.39) + 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.