VELESTO.KL WACC - Weighted Average Cost of Capital

The WACC of Velesto Energy Bhd (VELESTO.KL) is 10.6%.

The Cost of Equity of Velesto Energy Bhd (VELESTO.KL) is 11.30%.

The Cost of Debt of Velesto Energy Bhd (VELESTO.KL) is 5.35%.

	Range	Selected
Cost of equity	10.00% - 12.60%	11.30%
Tax rate	14.70% - 19.60%	17.15%
Cost of debt	4.50% - 6.20%	5.35%
WACC	9.3% - 11.8%	10.6%

WACC

VELESTO.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.91	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	12.60%

Tax rate	14.70%	19.60%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.50%	6.20%

After-tax WACC	9.3%	11.8%


Selected WACC	10.6%

VELESTO.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 VELESTO.KL:

cost_of_equity (11.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.91) + 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.