The WACC of Ta Ann Holdings Bhd (TAANN.KL) is 11.2%.
Range | Selected | |
Cost of equity | 9.70% - 14.40% | 12.05% |
Tax rate | 25.00% - 25.30% | 25.15% |
Cost of debt | 4.00% - 4.50% | 4.25% |
WACC | 9.1% - 13.3% | 11.2% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.87 | 1.23 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.70% | 14.40% |
Tax rate | 25.00% | 25.30% |
Debt/Equity ratio | 0.11 | 0.11 |
Cost of debt | 4.00% | 4.50% |
After-tax WACC | 9.1% | 13.3% |
Selected WACC | 11.2% | |
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 TAANN.KL:
cost_of_equity (12.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.87) + 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.