TM.KL WACC - Weighted Average Cost of Capital

The WACC of Telekom Malaysia Bhd (TM.KL) is 9.2%.

The Cost of Equity of Telekom Malaysia Bhd (TM.KL) is 10.25%.

The Cost of Debt of Telekom Malaysia Bhd (TM.KL) is 5.50%.

	Range	Selected
Cost of equity	9.00% - 11.50%	10.25%
Tax rate	15.80% - 25.10%	20.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.1% - 10.4%	9.2%

WACC

TM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.76	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.50%

Tax rate	15.80%	25.10%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.00%	7.00%

After-tax WACC	8.1%	10.4%


Selected WACC	9.2%

TM.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 TM.KL:

cost_of_equity (10.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.76) + 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.