SIGN.KL WACC - Weighted Average Cost of Capital

The WACC of Signature International Bhd (SIGN.KL) is 8.5%.

The Cost of Equity of Signature International Bhd (SIGN.KL) is 10.00%.

The Cost of Debt of Signature International Bhd (SIGN.KL) is 5.70%.

	Range	Selected
Cost of equity	7.90% - 12.10%	10.00%
Tax rate	25.60% - 30.60%	28.10%
Cost of debt	4.50% - 6.90%	5.70%
WACC	6.7% - 10.3%	8.5%

WACC

SIGN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.6	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	12.10%

Tax rate	25.60%	30.60%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.50%	6.90%

After-tax WACC	6.7%	10.3%


Selected WACC	8.5%

SIGN.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 SIGN.KL:

cost_of_equity (10.00%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.6) + 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.