UNISEM.KL WACC - Weighted Average Cost of Capital

The WACC of Unisem (M) Bhd (UNISEM.KL) is 9.7%.

The Cost of Equity of Unisem (M) Bhd (UNISEM.KL) is 10.05%.

The Cost of Debt of Unisem (M) Bhd (UNISEM.KL) is 4.60%.

	Range	Selected
Cost of equity	9.10% - 11.00%	10.05%
Tax rate	13.00% - 15.20%	14.10%
Cost of debt	4.30% - 4.90%	4.60%
WACC	8.8% - 10.7%	9.7%

WACC

UNISEM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.77	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.00%

Tax rate	13.00%	15.20%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.30%	4.90%

After-tax WACC	8.8%	10.7%


Selected WACC	9.7%

UNISEM.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 UNISEM.KL:

cost_of_equity (10.05%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.77) + 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.