UNIMECH.KL WACC - Weighted Average Cost of Capital

The WACC of Unimech Group Bhd (UNIMECH.KL) is 10.8%.

The Cost of Equity of Unimech Group Bhd (UNIMECH.KL) is 13.60%.

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

	Range	Selected
Cost of equity	11.70% - 15.50%	13.60%
Tax rate	25.70% - 26.50%	26.10%
Cost of debt	5.00% - 7.60%	6.30%
WACC	9.2% - 12.4%	10.8%

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	1.15	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	15.50%

Tax rate	25.70%	26.50%
Debt/Equity ratio	0.46	0.46
Cost of debt	5.00%	7.60%

After-tax WACC	9.2%	12.4%


Selected WACC	10.8%

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 (13.60%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.15) + 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.