YTL.KL WACC - Weighted Average Cost of Capital

The WACC of YTL Corporation Bhd (YTL.KL) is 7.7%.

The Cost of Equity of YTL Corporation Bhd (YTL.KL) is 16.25%.

The Cost of Debt of YTL Corporation Bhd (YTL.KL) is 5.45%.

	Range	Selected
Cost of equity	13.70% - 18.80%	16.25%
Tax rate	21.50% - 23.10%	22.30%
Cost of debt	4.00% - 6.90%	5.45%
WACC	6.2% - 9.2%	7.7%

WACC

YTL.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.44	1.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	18.80%

Tax rate	21.50%	23.10%
Debt/Equity ratio	2.47	2.47
Cost of debt	4.00%	6.90%

After-tax WACC	6.2%	9.2%


Selected WACC	7.7%

YTL.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 YTL.KL:

cost_of_equity (16.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.44) + 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.