FCW.KL WACC - Weighted Average Cost of Capital

The WACC of FCW Holdings Bhd (FCW.KL) is 17.6%.

The Cost of Equity of FCW Holdings Bhd (FCW.KL) is 7.10%.

The Cost of Debt of FCW Holdings Bhd (FCW.KL) is 67.25%.

	Range	Selected
Cost of equity	6.20% - 8.00%	7.10%
Tax rate	4.30% - 5.80%	5.05%
Cost of debt	23.80% - 110.70%	67.25%
WACC	9.3% - 25.8%	17.6%

WACC

FCW.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.36	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.00%

Tax rate	4.30%	5.80%
Debt/Equity ratio	0.23	0.23
Cost of debt	23.80%	110.70%

After-tax WACC	9.3%	25.8%


Selected WACC	17.6%

FCW.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 FCW.KL:

cost_of_equity (7.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.36) + 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.