HIAPTEK.KL WACC - Weighted Average Cost of Capital

The WACC of Hiap Teck Venture Bhd (HIAPTEK.KL) is 8.1%.

The Cost of Equity of Hiap Teck Venture Bhd (HIAPTEK.KL) is 7.85%.

The Cost of Debt of Hiap Teck Venture Bhd (HIAPTEK.KL) is 9.80%.

	Range	Selected
Cost of equity	6.50% - 9.20%	7.85%
Tax rate	13.00% - 16.60%	14.80%
Cost of debt	4.00% - 15.60%	9.80%
WACC	4.9% - 11.3%	8.1%

WACC

HIAPTEK.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.39	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.20%

Tax rate	13.00%	16.60%
Debt/Equity ratio	1.17	1.17
Cost of debt	4.00%	15.60%

After-tax WACC	4.9%	11.3%


Selected WACC	8.1%

HIAPTEK.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 HIAPTEK.KL:

cost_of_equity (7.85%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.39) + 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.