The WACC of Privasia Technology Bhd (PRIVA.KL) is 9.9%.
| Range | Selected | |
| Cost of equity | 10.10% - 15.00% | 12.55% |
| Tax rate | 14.00% - 20.20% | 17.10% |
| Cost of debt | 6.00% - 9.00% | 7.50% |
| WACC | 8.1% - 11.8% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.92 | 1.3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.10% | 15.00% |
| Tax rate | 14.00% | 20.20% |
| Debt/Equity ratio | 0.7 | 0.7 |
| Cost of debt | 6.00% | 9.00% |
| After-tax WACC | 8.1% | 11.8% |
| Selected WACC | 9.9% | |
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 PRIVA.KL:
cost_of_equity (12.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.92) + 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.