HAPSENG.KL WACC - Weighted Average Cost of Capital

The WACC of Hap Seng Consolidated Bhd (HAPSENG.KL) is 7.6%.

The Cost of Equity of Hap Seng Consolidated Bhd (HAPSENG.KL) is 12.20%.

The Cost of Debt of Hap Seng Consolidated Bhd (HAPSENG.KL) is 4.50%.

	Range	Selected
Cost of equity	8.70% - 15.70%	12.20%
Tax rate	24.70% - 28.80%	26.75%
Cost of debt	4.00% - 5.00%	4.50%
WACC	5.7% - 9.4%	7.6%

WACC

HAPSENG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.71	1.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	15.70%

Tax rate	24.70%	28.80%
Debt/Equity ratio	1.08	1.08
Cost of debt	4.00%	5.00%

After-tax WACC	5.7%	9.4%


Selected WACC	7.6%

HAPSENG.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 HAPSENG.KL:

cost_of_equity (12.20%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.71) + 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.