SDS.KL WACC - Weighted Average Cost of Capital

The WACC of SDS Group Bhd (SDS.KL) is 7.5%.

The Cost of Equity of SDS Group Bhd (SDS.KL) is 7.70%.

The Cost of Debt of SDS Group Bhd (SDS.KL) is 4.25%.

	Range	Selected
Cost of equity	6.20% - 9.20%	7.70%
Tax rate	24.10% - 24.40%	24.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.1% - 9.0%	7.5%

WACC

SDS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.36	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.20%

Tax rate	24.10%	24.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	4.50%

After-tax WACC	6.1%	9.0%


Selected WACC	7.5%

SDS.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 SDS.KL:

cost_of_equity (7.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.36) + 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.