YTLPOWR.KL WACC - Weighted Average Cost of Capital

The WACC of YTL Power International Bhd (YTLPOWR.KL) is 7.3%.

The Cost of Equity of YTL Power International Bhd (YTLPOWR.KL) is 10.40%.

The Cost of Debt of YTL Power International Bhd (YTLPOWR.KL) is 5.45%.

	Range	Selected
Cost of equity	9.10% - 11.70%	10.40%
Tax rate	16.30% - 18.20%	17.25%
Cost of debt	4.00% - 6.90%	5.45%
WACC	6.1% - 8.5%	7.3%

WACC

YTLPOWR.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	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.70%

Tax rate	16.30%	18.20%
Debt/Equity ratio	1.1	1.1
Cost of debt	4.00%	6.90%

After-tax WACC	6.1%	8.5%


Selected WACC	7.3%

YTLPOWR.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 YTLPOWR.KL:

cost_of_equity (10.40%) = 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.