SAPNRG.KL WACC - Weighted Average Cost of Capital

The WACC of Sapura Energy Bhd (SAPNRG.KL) is 5.5%.

The Cost of Equity of Sapura Energy Bhd (SAPNRG.KL) is 39.55%.

The Cost of Debt of Sapura Energy Bhd (SAPNRG.KL) is 4.25%.

	Range	Selected
Cost of equity	33.40% - 45.70%	39.55%
Tax rate	16.30% - 46.60%	31.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 5.5%	5.5%

WACC

SAPNRG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	4.32	5.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	33.40%	45.70%

Tax rate	16.30%	46.60%
Debt/Equity ratio	13.07	13.07
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	5.5%


Selected WACC	5.5%

SAPNRG.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 SAPNRG.KL:

cost_of_equity (39.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (4.32) + 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.