PLB.KL WACC - Weighted Average Cost of Capital

The WACC of Plb Engineering Bhd (PLB.KL) is 6.0%.

The Cost of Equity of Plb Engineering Bhd (PLB.KL) is 6.70%.

The Cost of Debt of Plb Engineering Bhd (PLB.KL) is 10.70%.

	Range	Selected
Cost of equity	5.40% - 8.00%	6.70%
Tax rate	44.50% - 49.10%	46.80%
Cost of debt	5.80% - 15.60%	10.70%
WACC	4.1% - 8.0%	6.0%

WACC

PLB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.23	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.00%

Tax rate	44.50%	49.10%
Debt/Equity ratio	1.47	1.47
Cost of debt	5.80%	15.60%

After-tax WACC	4.1%	8.0%


Selected WACC	6.0%

PLB.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 PLB.KL:

cost_of_equity (6.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.23) + 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.