HARNLEN.KL WACC - Weighted Average Cost of Capital

The WACC of Harn Len Corporation Bhd (HARNLEN.KL) is 8.0%.

The Cost of Equity of Harn Len Corporation Bhd (HARNLEN.KL) is 8.40%.

The Cost of Debt of Harn Len Corporation Bhd (HARNLEN.KL) is 5.15%.

	Range	Selected
Cost of equity	7.30% - 9.50%	8.40%
Tax rate	1.80% - 3.80%	2.80%
Cost of debt	4.40% - 5.90%	5.15%
WACC	6.9% - 9.0%	8.0%

WACC

HARNLEN.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.51	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.50%

Tax rate	1.80%	3.80%
Debt/Equity ratio	0.14	0.14
Cost of debt	4.40%	5.90%

After-tax WACC	6.9%	9.0%


Selected WACC	8.0%

HARNLEN.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 HARNLEN.KL:

cost_of_equity (8.40%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.51) + 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.