RANHILL.KL WACC - Weighted Average Cost of Capital
The WACC of Ranhill Utilities Bhd (RANHILL.KL) is 7.9%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.9% | 10% |
| Tax rate | 31.8% - 33.3% | 32.55% |
| Cost of debt | 5.5% - 6.9% | 6.2% |
| WACC | 6.5% - 9.2% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.63 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.9% |
| Tax rate | 31.8% | 33.3% |
| Debt/Equity ratio | 0.58 | 0.58 |
| Cost of debt | 5.5% | 6.9% |
| After-tax WACC | 6.5% | 9.2% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RANHILL.KL | Ranhill Utilities Bhd | 0.58 | 1.01 | 0.73 |
| 000605.SZ | Bohai Water Industry Co Ltd | 1.29 | 1.14 | 0.61 |
| 000692.SZ | Shenyang Huitian Thermal Power Co Ltd | 1.25 | 0.86 | 0.47 |
| 1853.HK | Jilin Province Chuncheng Heating Co Ltd | 0 | -0.18 | -0.18 |
| 2281.HK | Luzhou Xinglu Water Group Co Ltd | 4.37 | 0.47 | 0.12 |
| 3768.HK | Kunming Dianchi Water Treatment Co Ltd | 8.39 | 0.45 | 0.07 |
| 6136.HK | Kangda International Environmental Company Ltd | 14.49 | 0.45 | 0.04 |
| PBA.KL | Pba Holdings Bhd | 0.38 | 1.94 | 1.54 |
| TALIWRK.KL | Taliworks Corporation Bhd | 0.24 | 0.72 | 0.62 |
| WABAG.NS | Va Tech Wabag Ltd | 0.02 | 1.74 | 1.71 |
| Low | High | |
| Unlevered beta | 0.33 | 0.62 |
| Relevered beta | 0.45 | 0.85 |
| Adjusted relevered beta | 0.63 | 0.9 |
RANHILL.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 RANHILL.KL:
cost_of_equity (10.00%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.63) + 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.