UNIMECH.KL WACC - Weighted Average Cost of Capital

The WACC of Unimech Group Bhd (UNIMECH.KL) is 8.9%.

The Cost of Equity of Unimech Group Bhd (UNIMECH.KL) is 10.90%.

The Cost of Debt of Unimech Group Bhd (UNIMECH.KL) is 6.30%.

	Range	Selected
Cost of equity	8.80% - 13.00%	10.90%
Tax rate	26.10% - 26.50%	26.30%
Cost of debt	4.90% - 7.70%	6.30%
WACC	7.2% - 10.7%	8.9%

WACC

UNIMECH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.73	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	13.00%

Tax rate	26.10%	26.50%
Debt/Equity ratio	0.46	0.46
Cost of debt	4.90%	7.70%

After-tax WACC	7.2%	10.7%


Selected WACC	8.9%

UNIMECH.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 UNIMECH.KL:

cost_of_equity (10.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.73) + 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.