PMHLDG.KL WACC - Weighted Average Cost of Capital

The WACC of Pan Malaysia Holdings Bhd (PMHLDG.KL) is 9.0%.

The Cost of Equity of Pan Malaysia Holdings Bhd (PMHLDG.KL) is 9.10%.

The Cost of Debt of Pan Malaysia Holdings Bhd (PMHLDG.KL) is 6.45%.

	Range	Selected
Cost of equity	6.50% - 11.70%	9.10%
Tax rate	0.50% - 0.90%	0.70%
Cost of debt	5.90% - 7.00%	6.45%
WACC	6.5% - 11.5%	9.0%

WACC

PMHLDG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.4	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	11.70%

Tax rate	0.50%	0.90%
Debt/Equity ratio	0.05	0.05
Cost of debt	5.90%	7.00%

After-tax WACC	6.5%	11.5%


Selected WACC	9.0%

PMHLDG.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 PMHLDG.KL:

cost_of_equity (9.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.