PNEPCB.KL WACC - Weighted Average Cost of Capital

The WACC of Pne Pcb Bhd (PNEPCB.KL) is 8.7%.

The Cost of Equity of Pne Pcb Bhd (PNEPCB.KL) is 10.50%.

The Cost of Debt of Pne Pcb Bhd (PNEPCB.KL) is 6.25%.

	Range	Selected
Cost of equity	8.30% - 12.70%	10.50%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	5.50% - 7.00%	6.25%
WACC	7.1% - 10.2%	8.7%

WACC

PNEPCB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.66	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.70%

Tax rate	0.40%	0.50%
Debt/Equity ratio	0.75	0.75
Cost of debt	5.50%	7.00%

After-tax WACC	7.1%	10.2%


Selected WACC	8.7%

PNEPCB.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 PNEPCB.KL:

cost_of_equity (10.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.66) + 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.