SMISCOR.KL WACC - Weighted Average Cost of Capital

The WACC of SMIS Corporation Bhd (SMISCOR.KL) is 10.0%.

The Cost of Equity of SMIS Corporation Bhd (SMISCOR.KL) is 11.80%.

The Cost of Debt of SMIS Corporation Bhd (SMISCOR.KL) is 4.45%.

	Range	Selected
Cost of equity	9.40% - 14.20%	11.80%
Tax rate	16.00% - 28.70%	22.35%
Cost of debt	4.40% - 4.50%	4.45%
WACC	8.2% - 11.8%	10.0%

WACC

SMISCOR.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.83	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	14.20%

Tax rate	16.00%	28.70%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.40%	4.50%

After-tax WACC	8.2%	11.8%


Selected WACC	10.0%

SMISCOR.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 SMISCOR.KL:

cost_of_equity (11.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.83) + 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.