PETDAG.KL WACC - Weighted Average Cost of Capital

The WACC of Petronas Dagangan Bhd (PETDAG.KL) is 9.5%.

The Cost of Equity of Petronas Dagangan Bhd (PETDAG.KL) is 9.50%.

The Cost of Debt of Petronas Dagangan Bhd (PETDAG.KL) is 7.40%.

	Range	Selected
Cost of equity	8.20% - 10.80%	9.50%
Tax rate	27.30% - 27.80%	27.55%
Cost of debt	4.40% - 10.40%	7.40%
WACC	8.1% - 10.8%	9.5%

WACC

PETDAG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.64	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.80%

Tax rate	27.30%	27.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.40%	10.40%

After-tax WACC	8.1%	10.8%


Selected WACC	9.5%

PETDAG.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 PETDAG.KL:

cost_of_equity (9.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.64) + 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.