PWROOT.KL WACC - Weighted Average Cost of Capital
The WACC of Power Root Bhd (PWROOT.KL) is 8.0%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.1% | 8.15% |
| Tax rate | 16.6% - 17.5% | 17.05% |
| Cost of debt | 4.4% - 12.9% | 8.65% |
| WACC | 6.9% - 9.2% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.5 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.1% |
| Tax rate | 16.6% | 17.5% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.4% | 12.9% |
| After-tax WACC | 6.9% | 9.2% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PWROOT.KL | Power Root Bhd | 0.1 | 0.2 | 0.18 |
| 1115.HK | Tibet Water Resources Ltd | 0.6 | 0.19 | 0.12 |
| 1213.TW | Oceanic Beverages Co Inc | 0.6 | -0.05 | -0.03 |
| 1446.HK | Hung Fook Tong Group Holdings Ltd | 0.65 | 0.4 | 0.26 |
| 2599.T | Japan Foods Co Ltd | 0.69 | 0.13 | 0.08 |
| ADES.JK | Akasha Wira International Tbk PT | 0 | 0.53 | 0.53 |
| ALTO.JK | Tri Banyan Tirta Tbk PT | 2.98 | 1.02 | 0.29 |
| ERC.DB | Emirates Refreshments PSC | 0.01 | 0.3 | 0.3 |
| F&N.KL | Fraser & Neave Holdings Bhd | 0.03 | 0.62 | 0.61 |
| SPRITZER.KL | Spritzer Bhd | 0.05 | 0.47 | 0.45 |
| Low | High | |
| Unlevered beta | 0.23 | 0.3 |
| Relevered beta | 0.25 | 0.31 |
| Adjusted relevered beta | 0.5 | 0.54 |
PWROOT.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 PWROOT.KL:
cost_of_equity (8.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.5) + 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.