AEONCR.KL WACC - Weighted Average Cost of Capital

The WACC of AEON Credit Service (M) Bhd (AEONCR.KL) is 6.8%.

The Cost of Equity of AEON Credit Service (M) Bhd (AEONCR.KL) is 17.30%.

The Cost of Debt of AEON Credit Service (M) Bhd (AEONCR.KL) is 5.90%.

	Range	Selected
Cost of equity	12.70% - 21.90%	17.30%
Tax rate	26.70% - 28.20%	27.45%
Cost of debt	4.40% - 7.40%	5.90%
WACC	5.1% - 8.6%	6.8%

WACC

AEONCR.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.29	2.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	21.90%

Tax rate	26.70%	28.20%
Debt/Equity ratio	4.05	4.05
Cost of debt	4.40%	7.40%

After-tax WACC	5.1%	8.6%


Selected WACC	6.8%

AEONCR.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 AEONCR.KL:

cost_of_equity (17.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.29) + 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.