The WACC of Eversendai Corporation Bhd (SENDAI.KL) is 11.4%.
| Range | Selected | |
| Cost of equity | 16.40% - 21.20% | 18.80% |
| Tax rate | 1.00% - 2.90% | 1.95% |
| Cost of debt | 4.00% - 12.30% | 8.15% |
| WACC | 7.9% - 14.8% | 11.4% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 1.84 | 2.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.40% | 21.20% |
| Tax rate | 1.00% | 2.90% |
| Debt/Equity ratio | 2.19 | 2.19 |
| Cost of debt | 4.00% | 12.30% |
| After-tax WACC | 7.9% | 14.8% |
| Selected WACC | 11.4% | |
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 SENDAI.KL:
cost_of_equity (18.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.84) + 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.