SCGBHD.KL WACC - Weighted Average Cost of Capital

The WACC of Southern Cable Group Bhd (SCGBHD.KL) is 8.6%.

The Cost of Equity of Southern Cable Group Bhd (SCGBHD.KL) is 9.20%.

The Cost of Debt of Southern Cable Group Bhd (SCGBHD.KL) is 4.60%.

	Range	Selected
Cost of equity	7.50% - 10.90%	9.20%
Tax rate	24.30% - 25.50%	24.90%
Cost of debt	4.50% - 4.70%	4.60%
WACC	7.1% - 10.1%	8.6%

WACC

SCGBHD.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.55	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	10.90%

Tax rate	24.30%	25.50%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.50%	4.70%

After-tax WACC	7.1%	10.1%


Selected WACC	8.6%

SCGBHD.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 SCGBHD.KL:

cost_of_equity (9.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.55) + 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.