HHHCORP.KL WACC - Weighted Average Cost of Capital

The WACC of Hiap Huat Holdings Bhd (HHHCORP.KL) is 4.2%.

The Cost of Equity of Hiap Huat Holdings Bhd (HHHCORP.KL) is 10.55%.

The Cost of Debt of Hiap Huat Holdings Bhd (HHHCORP.KL) is 5.10%.

	Range	Selected
Cost of equity	7.40% - 13.70%	10.55%
Tax rate	35.60% - 40.30%	37.95%
Cost of debt	4.70% - 5.50%	5.10%
WACC	3.6% - 4.7%	4.2%

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	0.53	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	13.70%

Tax rate	35.60%	40.30%
Debt/Equity ratio	6.36	6.36
Cost of debt	4.70%	5.50%

After-tax WACC	3.6%	4.7%


Selected WACC	4.2%

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 (10.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.53) + 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.