The WACC of Rex Industry Bhd (REX.KL) is 7.2%.
Range | Selected | |
Cost of equity | 6.7% - 9.9% | 8.3% |
Tax rate | 8.5% - 20.0% | 14.25% |
Cost of debt | 4.6% - 5.0% | 4.8% |
WACC | 6.0% - 8.3% | 7.2% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.42 | 0.65 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 9.9% |
Tax rate | 8.5% | 20.0% |
Debt/Equity ratio | 0.36 | 0.36 |
Cost of debt | 4.6% | 5.0% |
After-tax WACC | 6.0% | 8.3% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
REX.KL | Rex Industry Bhd | 0.36 | 0.25 | 0.19 |
1695.HK | S&P International Holding Ltd | 0.44 | -0.05 | -0.03 |
COCOLND.KL | Cocoaland Holdings Bhd | 0 | 0.35 | 0.35 |
HWATAI.KL | Hwa Tai Industries Bhd | 0.9 | -0.35 | -0.2 |
LOTUS.KL | Lotus KFM Bhd | 0.05 | 1.01 | 0.97 |
OCB.KL | Ocb Bhd | 0.82 | -0.04 | -0.02 |
OFI.KL | Oriental Food Industries Holdings Bhd | 0 | 0.64 | 0.63 |
PMCORP.KL | Pan Malaysia Corporation Bhd | 0.82 | 0.66 | 0.38 |
SAUDEE.KL | Saudee Group Bhd | 0.04 | -0.14 | -0.13 |
SDS.KL | SDS Group Bhd | 0.05 | 1.03 | 0.98 |
Low | High | |
Unlevered beta | 0.1 | 0.36 |
Relevered beta | 0.13 | 0.48 |
Adjusted relevered beta | 0.42 | 0.65 |
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 REX.KL:
cost_of_equity (8.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.42) + 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.