TENAGA.KL
Tenaga Nasional Bhd
Price:  
14.08 
MYR
Volume:  
4,917,000
Malaysia | Electric Utilities

TENAGA.KL WACC - Weighted Average Cost of Capital

The WACC of Tenaga Nasional Bhd (TENAGA.KL) is 6.0%.

The Cost of Equity of Tenaga Nasional Bhd (TENAGA.KL) is 8.25%.
The Cost of Debt of Tenaga Nasional Bhd (TENAGA.KL) is 5%.

RangeSelected
Cost of equity7.0% - 9.5%8.25%
Tax rate18.6% - 20.3%19.45%
Cost of debt5.0% - 5.0%5%
WACC5.5% - 6.6%6.0%
WACC

TENAGA.KL WACC calculation

CategoryLowHigh
Long-term bond rate3.8%4.3%
Equity market risk premium6.9%7.8%
Adjusted beta0.480.6
Additional risk adjustments0.0%0.5%
Cost of equity7.0%9.5%
Tax rate18.6%20.3%
Debt/Equity ratio
1.141.14
Cost of debt5.0%5.0%
After-tax WACC5.5%6.6%
Selected WACC6.0%

TENAGA.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 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.