POS.KL WACC - Weighted Average Cost of Capital

The WACC of Pos Malaysia Bhd (POS.KL) is 10.6%.

The Cost of Equity of Pos Malaysia Bhd (POS.KL) is 23.80%.

The Cost of Debt of Pos Malaysia Bhd (POS.KL) is 6.30%.

	Range	Selected
Cost of equity	18.80% - 28.80%	23.80%
Tax rate	1.80% - 5.90%	3.85%
Cost of debt	5.60% - 7.00%	6.30%
WACC	8.9% - 12.2%	10.6%

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	2.2	3.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.80%	28.80%

Tax rate	1.80%	5.90%
Debt/Equity ratio	2.92	2.92
Cost of debt	5.60%	7.00%

After-tax WACC	8.9%	12.2%


Selected WACC	10.6%

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 (23.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (2.2) + 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.