SKBSHUT.KL WACC - Weighted Average Cost of Capital

The WACC of SKB Shutters Corporation Bhd (SKBSHUT.KL) is 9.0%.

The Cost of Equity of SKB Shutters Corporation Bhd (SKBSHUT.KL) is 11.55%.

The Cost of Debt of SKB Shutters Corporation Bhd (SKBSHUT.KL) is 4.40%.

	Range	Selected
Cost of equity	8.60% - 14.50%	11.55%
Tax rate	20.50% - 23.40%	21.95%
Cost of debt	4.30% - 4.50%	4.40%
WACC	7.0% - 11.0%	9.0%

WACC

SKBSHUT.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.71	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	14.50%

Tax rate	20.50%	23.40%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.30%	4.50%

After-tax WACC	7.0%	11.0%


Selected WACC	9.0%

SKBSHUT.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 SKBSHUT.KL:

cost_of_equity (11.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.71) + 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.