HARTA.KL WACC - Weighted Average Cost of Capital

The WACC of Hartalega Holdings Bhd (HARTA.KL) is 6.8%.

The Cost of Equity of Hartalega Holdings Bhd (HARTA.KL) is 6.85%.

The Cost of Debt of Hartalega Holdings Bhd (HARTA.KL) is 4.25%.

	Range	Selected
Cost of equity	4.10% - 9.60%	6.85%
Tax rate	23.20% - 37.50%	30.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.1% - 9.6%	6.8%

WACC

HARTA.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.05	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.10%	9.60%

Tax rate	23.20%	37.50%
Debt/Equity ratio	0	0
Cost of debt	4.00%	4.50%

After-tax WACC	4.1%	9.6%


Selected WACC	6.8%

HARTA.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 HARTA.KL:

cost_of_equity (6.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.05) + 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.