PIE.KL WACC - Weighted Average Cost of Capital

The WACC of PIE Industrial Bhd (PIE.KL) is 9.9%.

The Cost of Equity of PIE Industrial Bhd (PIE.KL) is 10.10%.

The Cost of Debt of PIE Industrial Bhd (PIE.KL) is 4.25%.

	Range	Selected
Cost of equity	7.80% - 12.40%	10.10%
Tax rate	16.50% - 18.20%	17.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.6% - 12.1%	9.9%

WACC

PIE.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.58	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	12.40%

Tax rate	16.50%	18.20%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	4.50%

After-tax WACC	7.6%	12.1%


Selected WACC	9.9%

PIE.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 PIE.KL:

cost_of_equity (10.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.58) + 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.