The WACC of Unimech Group Bhd (UNIMECH.KL) is 9.3%.
Range | Selected | |
Cost of equity | 9.1% - 13.8% | 11.45% |
Tax rate | 26.6% - 27.5% | 27.05% |
Cost of debt | 5.0% - 7.5% | 6.25% |
WACC | 7.4% - 11.2% | 9.3% |
Category | Low | High |
Long-term bond rate | 3.8% | 4.3% |
Equity market risk premium | 6.9% | 7.8% |
Adjusted beta | 0.78 | 1.15 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.1% | 13.8% |
Tax rate | 26.6% | 27.5% |
Debt/Equity ratio | 0.46 | 0.46 |
Cost of debt | 5.0% | 7.5% |
After-tax WACC | 7.4% | 11.2% |
Selected WACC | 9.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
UNIMECH.KL | Unimech Group Bhd | 0.46 | 0.27 | 0.2 |
APB.KL | APB Resources Bhd | 6.44 | -0.14 | -0.03 |
BOILERM.KL | Boilermech Holdings Bhd | 0.01 | 1.07 | 1.06 |
EITA.KL | EITA Resources Bhd | 0.31 | 0.46 | 0.37 |
EWEIN.KL | Ewein Bhd | 0.19 | 1.38 | 1.21 |
FITTERS.KL | Fitters Diversified Bhd | 0.33 | 1.01 | 0.81 |
HLT.KL | Hlt Global Bhd | 0 | 1.5 | 1.5 |
KEINHIN.KL | Kein Hing International Bhd | 0.4 | 0.76 | 0.58 |
KOBAY.KL | Kobay Technology Bhd | 0.31 | 1.84 | 1.5 |
MBL.KL | Muar Ban Lee Group Bhd | 0.16 | 0.35 | 0.31 |
Low | High | |
Unlevered beta | 0.5 | 0.91 |
Relevered beta | 0.67 | 1.22 |
Adjusted relevered beta | 0.78 | 1.15 |
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 (11.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.78) + 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.