TCS.KL WACC - Weighted Average Cost of Capital

The WACC of TCS Group Holdings Bhd (TCS.KL) is 9.5%.

The Cost of Equity of TCS Group Holdings Bhd (TCS.KL) is 10.00%.

The Cost of Debt of TCS Group Holdings Bhd (TCS.KL) is 10.90%.

	Range	Selected
Cost of equity	8.50% - 11.50%	10.00%
Tax rate	15.30% - 25.90%	20.60%
Cost of debt	6.20% - 15.60%	10.90%
WACC	7.4% - 11.5%	9.5%

WACC

TCS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.69	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.50%

Tax rate	15.30%	25.90%
Debt/Equity ratio	0.5	0.5
Cost of debt	6.20%	15.60%

After-tax WACC	7.4%	11.5%


Selected WACC	9.5%

TCS.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 TCS.KL:

cost_of_equity (10.00%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.69) + 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.