TEXCHEM.KL WACC - Weighted Average Cost of Capital

The WACC of Texchem Resources Bhd (TEXCHEM.KL) is 9.3%.

The Cost of Equity of Texchem Resources Bhd (TEXCHEM.KL) is 23.30%.

The Cost of Debt of Texchem Resources Bhd (TEXCHEM.KL) is 7.50%.

	Range	Selected
Cost of equity	18.90% - 27.70%	23.30%
Tax rate	24.00% - 24.00%	24.00%
Cost of debt	6.00% - 9.00%	7.50%
WACC	7.5% - 11.1%	9.3%

WACC

TEXCHEM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	2.2	2.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	27.70%

Tax rate	24.00%	24.00%
Debt/Equity ratio	3.9	3.9
Cost of debt	6.00%	9.00%

After-tax WACC	7.5%	11.1%


Selected WACC	9.3%

TEXCHEM.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 TEXCHEM.KL:

cost_of_equity (23.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (2.2) + 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.