TONGHER.KL WACC - Weighted Average Cost of Capital
The WACC of Tong Herr Resources Bhd (TONGHER.KL) is 9.3%.
| Range | Selected | |
| Cost of equity | 8.0% - 12.8% | 10.4% |
| Tax rate | 22.6% - 24.7% | 23.65% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.3% - 11.4% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.61 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 12.8% |
| Tax rate | 22.6% | 24.7% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.3% | 11.4% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TONGHER.KL | Tong Herr Resources Bhd | 0.17 | 0.42 | 0.37 |
| BOILERM.KL | Boilermech Holdings Bhd | 0.01 | 1.07 | 1.06 |
| CBIP.KL | CB Industrial Product Holding Bhd | 0.34 | 0.31 | 0.24 |
| CHINWEL.KL | Chin Well Holdings Bhd | 0.01 | 0.22 | 0.22 |
| EITA.KL | EITA Resources Bhd | 0.31 | 0.46 | 0.37 |
| EWEIN.KL | Ewein Bhd | 0.19 | 1.38 | 1.2 |
| FITTERS.KL | Fitters Diversified Bhd | 0.33 | 1.01 | 0.81 |
| HLT.KL | Hlt Global Bhd | 0 | 1.5 | 1.5 |
| KOBAY.KL | Kobay Technology Bhd | 0.31 | 1.84 | 1.49 |
| UNIMECH.KL | Unimech Group Bhd | 0.46 | 0.27 | 0.2 |
| Low | High | |
| Unlevered beta | 0.37 | 0.91 |
| Relevered beta | 0.42 | 1.03 |
| Adjusted relevered beta | 0.61 | 1.02 |
TONGHER.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 TONGHER.KL:
cost_of_equity (10.40%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.61) + 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.