VERSATL.KL WACC - Weighted Average Cost of Capital

The WACC of Versatile Creative Bhd (VERSATL.KL) is 9.5%.

The Cost of Equity of Versatile Creative Bhd (VERSATL.KL) is 9.80%.

The Cost of Debt of Versatile Creative Bhd (VERSATL.KL) is 8.55%.

	Range	Selected
Cost of equity	7.90% - 11.70%	9.80%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	4.40% - 12.70%	8.55%
WACC	7.5% - 11.5%	9.5%

WACC

VERSATL.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.61	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.70%

Tax rate	24.00%	24.00%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.40%	12.70%

After-tax WACC	7.5%	11.5%


Selected WACC	9.5%

VERSATL.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 VERSATL.KL:

cost_of_equity (9.80%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.61) + 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.