SIGN.KL WACC - Weighted Average Cost of Capital

The WACC of Signature International Bhd (SIGN.KL) is 7.7%.

The Cost of Equity of Signature International Bhd (SIGN.KL) is 8.80%.

The Cost of Debt of Signature International Bhd (SIGN.KL) is 6.00%.

	Range	Selected
Cost of equity	7.00% - 10.60%	8.80%
Tax rate	23.50% - 25.30%	24.40%
Cost of debt	4.50% - 7.50%	6.00%
WACC	6.1% - 9.3%	7.7%

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	0.47	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.60%

Tax rate	23.50%	25.30%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.50%	7.50%

After-tax WACC	6.1%	9.3%


Selected WACC	7.7%

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 (8.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.47) + 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.