HHHCORP.KL WACC - Weighted Average Cost of Capital

The WACC of Hiap Huat Holdings Bhd (HHHCORP.KL) is 7.9%.

The Cost of Equity of Hiap Huat Holdings Bhd (HHHCORP.KL) is 25.10%.

The Cost of Debt of Hiap Huat Holdings Bhd (HHHCORP.KL) is 5.55%.

	Range	Selected
Cost of equity	18.20% - 32.00%	25.10%
Tax rate	27.90% - 33.50%	30.70%
Cost of debt	5.50% - 5.60%	5.55%
WACC	6.7% - 9.1%	7.9%

WACC

HHHCORP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	2.1	3.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.20%	32.00%

Tax rate	27.90%	33.50%
Debt/Equity ratio	4.23	4.23
Cost of debt	5.50%	5.60%

After-tax WACC	6.7%	9.1%


Selected WACC	7.9%

HHHCORP.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 HHHCORP.KL:

cost_of_equity (25.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (2.1) + 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.