POS.KL WACC - Weighted Average Cost of Capital

The WACC of Pos Malaysia Bhd (POS.KL) is 7.3%.

The Cost of Equity of Pos Malaysia Bhd (POS.KL) is 9.55%.

The Cost of Debt of Pos Malaysia Bhd (POS.KL) is 6.95%.

	Range	Selected
Cost of equity	6.70% - 12.40%	9.55%
Tax rate	7.50% - 11.60%	9.55%
Cost of debt	6.90% - 7.00%	6.95%
WACC	6.5% - 8.1%	7.3%

WACC

POS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.42	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	12.40%

Tax rate	7.50%	11.60%
Debt/Equity ratio	2.24	2.24
Cost of debt	6.90%	7.00%

After-tax WACC	6.5%	8.1%


Selected WACC	7.3%

POS.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 POS.KL:

cost_of_equity (9.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.42) + 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.