The WACC of Vortex Consolidated Bhd (VC.KL) is 15.0%.
| Range | Selected | |
| Cost of equity | 6.70% - 9.20% | 7.95% |
| Tax rate | 17.50% - 19.70% | 18.60% |
| Cost of debt | 7.00% - 386.90% | 196.95% |
| WACC | 6.7% - 23.2% | 15.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 7.3% | 8.3% |
| Adjusted beta | 0.39 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.70% | 9.20% |
| Tax rate | 17.50% | 19.70% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 7.00% | 386.90% |
| After-tax WACC | 6.7% | 23.2% |
| Selected WACC | 15.0% | |
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 VC.KL:
cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (7.80%) * adjusted_beta (0.39) + 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.