UNIMECH.KL WACC - Weighted Average Cost of Capital

The WACC of Unimech Group Bhd (UNIMECH.KL) is 9.1%.

The Cost of Equity of Unimech Group Bhd (UNIMECH.KL) is 11.40%.

The Cost of Debt of Unimech Group Bhd (UNIMECH.KL) is 6.25%.

	Range	Selected
Cost of equity	8.50% - 14.30%	11.40%
Tax rate	26.60% - 27.50%	27.05%
Cost of debt	5.00% - 7.50%	6.25%
WACC	6.9% - 11.3%	9.1%

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	0.69	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	14.30%

Tax rate	26.60%	27.50%
Debt/Equity ratio	0.51	0.51
Cost of debt	5.00%	7.50%

After-tax WACC	6.9%	11.3%


Selected WACC	9.1%

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 (11.40%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.69) + 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.