SAPIND.KL WACC - Weighted Average Cost of Capital

The WACC of Sapura Industrial Bhd (SAPIND.KL) is 8.6%.

The Cost of Equity of Sapura Industrial Bhd (SAPIND.KL) is 12.55%.

The Cost of Debt of Sapura Industrial Bhd (SAPIND.KL) is 5.40%.

	Range	Selected
Cost of equity	10.40% - 14.70%	12.55%
Tax rate	33.50% - 34.90%	34.20%
Cost of debt	4.90% - 5.90%	5.40%
WACC	7.3% - 9.9%	8.6%

WACC

SAPIND.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.97	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.70%

Tax rate	33.50%	34.90%
Debt/Equity ratio	0.78	0.78
Cost of debt	4.90%	5.90%

After-tax WACC	7.3%	9.9%


Selected WACC	8.6%

SAPIND.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 SAPIND.KL:

cost_of_equity (12.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.97) + 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.