TOPGLOV.KL WACC - Weighted Average Cost of Capital

The WACC of Top Glove Corporation Bhd (TOPGLOV.KL) is 10.0%.

The Cost of Equity of Top Glove Corporation Bhd (TOPGLOV.KL) is 10.45%.

The Cost of Debt of Top Glove Corporation Bhd (TOPGLOV.KL) is 4.25%.

	Range	Selected
Cost of equity	9.10% - 11.80%	10.45%
Tax rate	19.80% - 21.70%	20.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.7% - 11.3%	10.0%

WACC

TOPGLOV.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.77	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.80%

Tax rate	19.80%	21.70%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	4.50%

After-tax WACC	8.7%	11.3%


Selected WACC	10.0%

TOPGLOV.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 TOPGLOV.KL:

cost_of_equity (10.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.77) + 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.