PETRONM.KL
Petron Malaysia Refining & Marketing Bhd
Price:  
3.62 
MYR
Volume:  
10,100.00
Malaysia | Oil, Gas & Consumable Fuels
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PETRONM.KL WACC - Weighted Average Cost of Capital

The WACC of Petron Malaysia Refining & Marketing Bhd (PETRONM.KL) is 6.0%.

The Cost of Equity of Petron Malaysia Refining & Marketing Bhd (PETRONM.KL) is 8.20%.
The Cost of Debt of Petron Malaysia Refining & Marketing Bhd (PETRONM.KL) is 5.45%.

Range Selected
Cost of equity 7.10% - 9.30% 8.20%
Tax rate 24.60% - 30.70% 27.65%
Cost of debt 4.00% - 6.90% 5.45%
WACC 5.0% - 7.0% 6.0%
WACC

PETRONM.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.48 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 9.30%
Tax rate 24.60% 30.70%
Debt/Equity ratio 1.04 1.04
Cost of debt 4.00% 6.90%
After-tax WACC 5.0% 7.0%
Selected WACC 6.0%

PETRONM.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 PETRONM.KL:

cost_of_equity (8.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.48) + 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.