SHCHAN.KL WACC - Weighted Average Cost of Capital

The WACC of Sin Heng Chan (Malaya) Bhd (SHCHAN.KL) is 12.2%.

The Cost of Equity of Sin Heng Chan (Malaya) Bhd (SHCHAN.KL) is 7.90%.

The Cost of Debt of Sin Heng Chan (Malaya) Bhd (SHCHAN.KL) is 14.80%.

	Range	Selected
Cost of equity	6.50% - 9.30%	7.90%
Tax rate	3.60% - 4.80%	4.20%
Cost of debt	5.80% - 23.80%	14.80%
WACC	5.8% - 18.6%	12.2%

WACC

SHCHAN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.39	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.30%

Tax rate	3.60%	4.80%
Debt/Equity ratio	2.31	2.31
Cost of debt	5.80%	23.80%

After-tax WACC	5.8%	18.6%


Selected WACC	12.2%

SHCHAN.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 SHCHAN.KL:

cost_of_equity (7.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.39) + 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.