SLVEST.KL WACC - Weighted Average Cost of Capital

The WACC of Solarvest Holdings Bhd (SLVEST.KL) is 10.4%.

The Cost of Equity of Solarvest Holdings Bhd (SLVEST.KL) is 11.20%.

The Cost of Debt of Solarvest Holdings Bhd (SLVEST.KL) is 6.75%.

	Range	Selected
Cost of equity	10.00% - 12.40%	11.20%
Tax rate	27.40% - 27.70%	27.55%
Cost of debt	4.90% - 8.60%	6.75%
WACC	9.1% - 11.6%	10.4%

WACC

SLVEST.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.9	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	12.40%

Tax rate	27.40%	27.70%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.90%	8.60%

After-tax WACC	9.1%	11.6%


Selected WACC	10.4%

SLVEST.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 SLVEST.KL:

cost_of_equity (11.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.9) + 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.