The WACC of Tiger Synergy Bhd (TIGER.KL) is 8.6%.
| Range | Selected | |
| Cost of equity | 6.80% - 10.60% | 8.70% |
| Tax rate | 1.00% - 2.00% | 1.50% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 6.8% - 10.4% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.9% | 6.9% |
| Adjusted beta | 0.43 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.80% | 10.60% |
| Tax rate | 1.00% | 2.00% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 6.8% | 10.4% |
| Selected WACC | 8.6% | |
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 TIGER.KL:
cost_of_equity (8.70%) = risk_free_rate (4.45%) + equity_risk_premium (6.40%) * adjusted_beta (0.43) + 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.