TANCO.KL WACC - Weighted Average Cost of Capital
The WACC of Tanco Holdings Bhd (TANCO.KL) is 6.9%.
| Range | Selected | |
| Cost of equity | 6.2% - 7.6% | 6.9% |
| Tax rate | 2.6% - 5.0% | 3.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.2% - 7.6% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.35 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 7.6% |
| Tax rate | 2.6% | 5.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.2% | 7.6% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TANCO.KL | Tanco Holdings Bhd | 0.01 | 0.72 | 0.71 |
| 2379.HK | Zhongtian International Ltd | 7.24 | 0.23 | 0.03 |
| 495.HK | Paladin Ltd | 6.8 | 0.51 | 0.07 |
| 5GZ.SI | HGH Holdings Ltd | 0.28 | -0.18 | -0.15 |
| BERTAM.KL | Bertam Alliance Bhd | 0.09 | -0.24 | -0.22 |
| LBICAP.KL | Lbi Capital Bhd | 0.14 | 1.1 | 0.97 |
| MAGNA.KL | Magna Prima Bhd | 0 | 0.03 | 0.03 |
| MUH.KL | Multi-Usage Holdings Bhd | 0.01 | 0.03 | 0.03 |
| TALAMT.KL | Talam Transform Bhd | 0.41 | -0.98 | -0.7 |
| TCIDEVELOP.NS | TCI Developers Ltd | 0.07 | 0.41 | 0.39 |
| Low | High | |
| Unlevered beta | 0.03 | 0.04 |
| Relevered beta | 0.03 | 0.04 |
| Adjusted relevered beta | 0.35 | 0.36 |
TANCO.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 TANCO.KL:
cost_of_equity (6.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.35) + 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.