SDS.KL WACC - Weighted Average Cost of Capital

The WACC of SDS Group Bhd (SDS.KL) is 10.0%.

The Cost of Equity of SDS Group Bhd (SDS.KL) is 10.55%.

The Cost of Debt of SDS Group Bhd (SDS.KL) is 4.35%.

	Range	Selected
Cost of equity	9.10% - 12.00%	10.55%
Tax rate	24.10% - 24.40%	24.25%
Cost of debt	4.20% - 4.50%	4.35%
WACC	8.6% - 11.3%	10.0%

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	0.78	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	12.00%

Tax rate	24.10%	24.40%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.20%	4.50%

After-tax WACC	8.6%	11.3%


Selected WACC	10.0%

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 (10.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.78) + 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.