THETA.KL WACC - Weighted Average Cost of Capital

The WACC of Theta Edge Bhd (THETA.KL) is 8.0%.

The Cost of Equity of Theta Edge Bhd (THETA.KL) is 8.15%.

The Cost of Debt of Theta Edge Bhd (THETA.KL) is 7.55%.

	Range	Selected
Cost of equity	6.90% - 9.40%	8.15%
Tax rate	0.30% - 1.40%	0.85%
Cost of debt	7.00% - 8.10%	7.55%
WACC	6.9% - 9.1%	8.0%

WACC

THETA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.46	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.40%

Tax rate	0.30%	1.40%
Debt/Equity ratio	0.23	0.23
Cost of debt	7.00%	8.10%

After-tax WACC	6.9%	9.1%


Selected WACC	8.0%

THETA.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 THETA.KL:

cost_of_equity (8.15%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.46) + 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.