SBCCORP.KL WACC - Weighted Average Cost of Capital

The WACC of Sbc Corporation Bhd (SBCCORP.KL) is 7.5%.

The Cost of Equity of Sbc Corporation Bhd (SBCCORP.KL) is 12.65%.

The Cost of Debt of Sbc Corporation Bhd (SBCCORP.KL) is 6.35%.

	Range	Selected
Cost of equity	11.10% - 14.20%	12.65%
Tax rate	31.80% - 45.90%	38.85%
Cost of debt	5.50% - 7.20%	6.35%
WACC	6.8% - 8.2%	7.5%

WACC

SBCCORP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.06	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.20%

Tax rate	31.80%	45.90%
Debt/Equity ratio	1.41	1.41
Cost of debt	5.50%	7.20%

After-tax WACC	6.8%	8.2%


Selected WACC	7.5%

SBCCORP.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 SBCCORP.KL:

cost_of_equity (12.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.06) + 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.