SEM.KL WACC - Weighted Average Cost of Capital

The WACC of 7-Eleven Malaysia Holdings Bhd (SEM.KL) is 6.9%.

The Cost of Equity of 7-Eleven Malaysia Holdings Bhd (SEM.KL) is 8.45%.

The Cost of Debt of 7-Eleven Malaysia Holdings Bhd (SEM.KL) is 5.50%.

	Range	Selected
Cost of equity	7.30% - 9.60%	8.45%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.7% - 8.0%	6.9%

WACC

SEM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.52	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.60%

Tax rate	24.00%	24.00%
Debt/Equity ratio	0.6	0.6
Cost of debt	4.00%	7.00%

After-tax WACC	5.7%	8.0%


Selected WACC	6.9%

SEM.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 SEM.KL:

cost_of_equity (8.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.52) + 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.