TGL.KL WACC - Weighted Average Cost of Capital

The WACC of Teo Guan Lee Corporation Bhd (TGL.KL) is 10.5%.

The Cost of Equity of Teo Guan Lee Corporation Bhd (TGL.KL) is 11.60%.

The Cost of Debt of Teo Guan Lee Corporation Bhd (TGL.KL) is 4.25%.

	Range	Selected
Cost of equity	10.10% - 13.10%	11.60%
Tax rate	21.60% - 23.00%	22.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.2% - 11.8%	10.5%

WACC

TGL.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.93	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.10%

Tax rate	21.60%	23.00%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.00%	4.50%

After-tax WACC	9.2%	11.8%


Selected WACC	10.5%

TGL.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 TGL.KL:

cost_of_equity (11.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.93) + 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.