RHONEMA.KL WACC - Weighted Average Cost of Capital

The WACC of Rhone Ma Holdings Bhd (RHONEMA.KL) is 8.3%.

The Cost of Equity of Rhone Ma Holdings Bhd (RHONEMA.KL) is 9.15%.

The Cost of Debt of Rhone Ma Holdings Bhd (RHONEMA.KL) is 4.30%.

	Range	Selected
Cost of equity	7.90% - 10.40%	9.15%
Tax rate	28.30% - 29.00%	28.65%
Cost of debt	4.10% - 4.50%	4.30%
WACC	7.2% - 9.4%	8.3%

WACC

RHONEMA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.6	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.40%

Tax rate	28.30%	29.00%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.10%	4.50%

After-tax WACC	7.2%	9.4%


Selected WACC	8.3%

RHONEMA.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 RHONEMA.KL:

cost_of_equity (9.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.6) + 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.