TWRREIT.KL WACC - Weighted Average Cost of Capital
The WACC of Tower Real Estate Investment Trust (TWRREIT.KL) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.2% | 8.25% |
| Tax rate | 6.7% - 14.6% | 10.65% |
| Cost of debt | 9.0% - 11.7% | 10.35% |
| WACC | 8.0% - 9.7% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.52 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.2% |
| Tax rate | 6.7% | 14.6% |
| Debt/Equity ratio | 1.6 | 1.6 |
| Cost of debt | 9.0% | 11.7% |
| After-tax WACC | 8.0% | 9.7% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TWRREIT.KL | Tower Real Estate Investment Trust | 1.6 | 0.46 | 0.19 |
| ALSREIT.KL | Al-Salam Real Estate Investment Trust | 2.72 | 0.64 | 0.19 |
| AMFIRST.KL | AmFIRST Real Estate Investment Trust | 3.84 | 0.51 | 0.12 |
| ATRIUM.KL | Atrium Real Estate Investment Trust | 0.84 | 0.12 | 0.07 |
| B-WORK.BK | Bualuang Office Leasehold Real Estate Investment Trust | 0.48 | 0.48 | 0.34 |
| SENTRAL.KL | Sentral REIT | 1.24 | 0.23 | 0.11 |
| SSTRT.BK | Sub Sri Thai Real Estate Investment Trust | 0.16 | -0.02 | -0.01 |
| TPRIME.BK | Thailand Prime Property Freehold and Leasehold Real Estate Investment Trust | 0.68 | 0.58 | 0.36 |
| UOAREIT.KL | UOA Real Estate Investment Trust | 1.3 | 0.25 | 0.12 |
| WHABT.BK | WHA Business Complex Freehold and Leasehold Real Estate Investment Trust | 0.38 | 0.15 | 0.11 |
| Low | High | |
| Unlevered beta | 0.12 | 0.14 |
| Relevered beta | 0.28 | 0.34 |
| Adjusted relevered beta | 0.52 | 0.56 |
TWRREIT.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 TWRREIT.KL:
cost_of_equity (8.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.52) + 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.