The WACC of United Malacca Bhd (UMCCA.KL) is 8.7%.
Range | Selected | |
Cost of equity | 7.9% - 10.5% | 9.2% |
Tax rate | 30.4% - 33.9% | 32.15% |
Cost of debt | 4.4% - 6.0% | 5.2% |
WACC | 7.5% - 9.9% | 8.7% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.6 | 0.72 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.9% | 10.5% |
Tax rate | 30.4% | 33.9% |
Debt/Equity ratio | 0.1 | 0.1 |
Cost of debt | 4.4% | 6.0% |
After-tax WACC | 7.5% | 9.9% |
Selected WACC | 8.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
UMCCA.KL | United Malacca Bhd | 0.06 | 0.15 | 0.14 |
BPLANT.KL | Boustead Plantations Bhd | 0.25 | 0.75 | 0.64 |
CHINTEK.KL | Chin Teck Plantations Bhd | 0.01 | 0.24 | 0.24 |
HARNLEN.KL | Harn Len Corporation Bhd | 0.18 | 1.19 | 1.06 |
HSPLANT.KL | Hap Seng Plantations Holdings Bhd | 0.04 | 0.75 | 0.73 |
KLUANG.KL | Kluang Rubber Company (Malaya) Bhd | 0.01 | 0.48 | 0.48 |
MHC.KL | MHC Plantations Bhd | 0.3 | 0.05 | 0.04 |
NPC.KL | NPC Resources Bhd | 0.7 | -0.4 | -0.27 |
RSAWIT.KL | Rimbunan Sawit Bhd | 0.63 | 1.25 | 0.88 |
SWKPLNT.KL | Sarawak Plantation Bhd | 0.06 | 0.51 | 0.48 |
Low | High | |
Unlevered beta | 0.38 | 0.55 |
Relevered beta | 0.4 | 0.58 |
Adjusted relevered beta | 0.6 | 0.72 |
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 UMCCA.KL:
cost_of_equity (9.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.6) + 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.