PMETAL.KL WACC - Weighted Average Cost of Capital

The WACC of Press Metal Aluminium Holdings Bhd (PMETAL.KL) is 10.8%.

The Cost of Equity of Press Metal Aluminium Holdings Bhd (PMETAL.KL) is 11.55%.

The Cost of Debt of Press Metal Aluminium Holdings Bhd (PMETAL.KL) is 4.65%.

	Range	Selected
Cost of equity	9.70% - 13.40%	11.55%
Tax rate	8.80% - 9.80%	9.30%
Cost of debt	4.60% - 4.70%	4.65%
WACC	9.2% - 12.4%	10.8%

WACC

PMETAL.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.87	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	13.40%

Tax rate	8.80%	9.80%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.60%	4.70%

After-tax WACC	9.2%	12.4%


Selected WACC	10.8%

PMETAL.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 PMETAL.KL:

cost_of_equity (11.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.87) + 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.