The WACC of Tenaga Nasional Bhd (TENAGA.KL) is 6.0%.
Range | Selected | |
Cost of equity | 7.0% - 9.5% | 8.25% |
Tax rate | 18.6% - 20.3% | 19.45% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.5% - 6.6% | 6.0% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.48 | 0.6 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.0% | 9.5% |
Tax rate | 18.6% | 20.3% |
Debt/Equity ratio | 1.14 | 1.14 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.5% | 6.6% |
Selected WACC | 6.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TENAGA.KL | Tenaga Nasional Bhd | 1.14 | 1.05 | 0.54 |
2.HK | CLP Holdings Ltd | 0.39 | 0.11 | 0.08 |
9504.T | Chugoku Electric Power Co Inc | 11.29 | 0.67 | 0.07 |
9505.T | Hokuriku Electric Power Co | 7.84 | 0.83 | 0.11 |
9507.T | Shikoku Electric Power Co Inc | 3.8 | 0.85 | 0.21 |
9509.T | Hokkaido Electric Power Co Inc | 9.4 | 0.98 | 0.11 |
HYDR.ME | Federal Hydro-Generating Company RusHydro PAO | 1.12 | 0.12 | 0.06 |
IRAO.ME | Inter RAO YEES PAO | 0.22 | 0.48 | 0.41 |
POWERGRID.NS | Power Grid Corporation of India Ltd | 0.46 | 0.94 | 0.68 |
RSTI.ME | Rossiyskiye Seti PAO | 5.03 | 1.1 | 0.22 |
Low | High | |
Unlevered beta | 0.11 | 0.21 |
Relevered beta | 0.22 | 0.4 |
Adjusted relevered beta | 0.48 | 0.6 |
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 TENAGA.KL:
cost_of_equity (8.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.48) + 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.