HIGHTEC.KL WACC - Weighted Average Cost of Capital
The WACC of Kumpulan H & L High-Tech Bhd (HIGHTEC.KL) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.8% | 8.1% |
| Tax rate | 15.7% - 16.1% | 15.9% |
| Cost of debt | 4.2% - 4.5% | 4.35% |
| WACC | 5.8% - 8.7% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.38 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.8% |
| Tax rate | 15.7% | 16.1% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.2% | 4.5% |
| After-tax WACC | 5.8% | 8.7% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HIGHTEC.KL | Kumpulan H & L High-Tech Bhd | 0.23 | -0.31 | -0.26 |
| Low | High | |
| Unlevered beta | -0.26 | -0.26 |
| Relevered beta | 0.07 | 0.46 |
| Adjusted relevered beta | 0.38 | 0.64 |
HIGHTEC.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 HIGHTEC.KL:
cost_of_equity (8.10%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.38) + 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.