TFP.KL
TFP Solutions Bhd
Price:  
0.03 
MYR
Volume:  
704,200.00
Malaysia | Software
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TFP.KL WACC - Weighted Average Cost of Capital

The WACC of TFP Solutions Bhd (TFP.KL) is 7.7%.

The Cost of Equity of TFP Solutions Bhd (TFP.KL) is 7.65%.
The Cost of Debt of TFP Solutions Bhd (TFP.KL) is 8.65%.

Range Selected
Cost of equity 6.40% - 8.90% 7.65%
Tax rate 0.30% - 0.60% 0.45%
Cost of debt 7.00% - 10.30% 8.65%
WACC 6.4% - 9.0% 7.7%
WACC

TFP.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.38 0.53
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.90%
Tax rate 0.30% 0.60%
Debt/Equity ratio 0.02 0.02
Cost of debt 7.00% 10.30%
After-tax WACC 6.4% 9.0%
Selected WACC 7.7%

TFP.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 TFP.KL:

cost_of_equity (7.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.38) + 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.