RCECAP.KL WACC - Weighted Average Cost of Capital

The WACC of Rce Capital Bhd (RCECAP.KL) is 5.2%.

The Cost of Equity of Rce Capital Bhd (RCECAP.KL) is 7.50%.

The Cost of Debt of Rce Capital Bhd (RCECAP.KL) is 4.25%.

	Range	Selected
Cost of equity	6.50% - 8.50%	7.50%
Tax rate	24.90% - 25.20%	25.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.7% - 5.8%	5.2%

WACC

RCECAP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.4	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.50%

Tax rate	24.90%	25.20%
Debt/Equity ratio	1.09	1.09
Cost of debt	4.00%	4.50%

After-tax WACC	4.7%	5.8%


Selected WACC	5.2%

RCECAP.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 RCECAP.KL:

cost_of_equity (7.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.4) + 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.