HIBISCS.KL WACC - Weighted Average Cost of Capital

The WACC of Hibiscus Petroleum Bhd (HIBISCS.KL) is 9.5%.

The Cost of Equity of Hibiscus Petroleum Bhd (HIBISCS.KL) is 14.25%.

The Cost of Debt of Hibiscus Petroleum Bhd (HIBISCS.KL) is 4.25%.

	Range	Selected
Cost of equity	11.90% - 16.60%	14.25%
Tax rate	37.60% - 40.40%	39.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.1% - 11.0%	9.5%

WACC

HIBISCS.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.18	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	16.60%

Tax rate	37.60%	40.40%
Debt/Equity ratio	0.69	0.69
Cost of debt	4.00%	4.50%

After-tax WACC	8.1%	11.0%


Selected WACC	9.5%

HIBISCS.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 HIBISCS.KL:

cost_of_equity (14.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.18) + 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.