PMBTECH.KL WACC - Weighted Average Cost of Capital

The WACC of PMB Technology Bhd (PMBTECH.KL) is 10.4%.

The Cost of Equity of PMB Technology Bhd (PMBTECH.KL) is 12.70%.

The Cost of Debt of PMB Technology Bhd (PMBTECH.KL) is 4.25%.

	Range	Selected
Cost of equity	11.30% - 14.10%	12.70%
Tax rate	16.50% - 18.90%	17.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.3% - 11.6%	10.4%

WACC

PMBTECH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.09	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.10%

Tax rate	16.50%	18.90%
Debt/Equity ratio	0.32	0.32
Cost of debt	4.00%	4.50%

After-tax WACC	9.3%	11.6%


Selected WACC	10.4%

PMBTECH.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 PMBTECH.KL:

cost_of_equity (12.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.09) + 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.