DPIH.KL WACC - Weighted Average Cost of Capital

The WACC of DPI Holdings Bhd (DPIH.KL) is 12.2%.

The Cost of Equity of DPI Holdings Bhd (DPIH.KL) is 10.30%.

The Cost of Debt of DPI Holdings Bhd (DPIH.KL) is 29.80%.

	Range	Selected
Cost of equity	8.80% - 11.80%	10.30%
Tax rate	28.30% - 29.50%	28.90%
Cost of debt	4.40% - 55.20%	29.80%
WACC	7.8% - 16.6%	12.2%

WACC

DPIH.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.74	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.80%

Tax rate	28.30%	29.50%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.40%	55.20%

After-tax WACC	7.8%	16.6%


Selected WACC	12.2%

DPIH.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 DPIH.KL:

cost_of_equity (10.30%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.74) + 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.