HPMT.KL WACC - Weighted Average Cost of Capital

The WACC of HPMT Holdings Bhd (HPMT.KL) is 9.3%.

The Cost of Equity of HPMT Holdings Bhd (HPMT.KL) is 10.45%.

The Cost of Debt of HPMT Holdings Bhd (HPMT.KL) is 4.85%.

	Range	Selected
Cost of equity	8.20% - 12.70%	10.45%
Tax rate	20.30% - 23.60%	21.95%
Cost of debt	4.80% - 4.90%	4.85%
WACC	7.4% - 11.2%	9.3%

WACC

HPMT.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.64	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	12.70%

Tax rate	20.30%	23.60%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.80%	4.90%

After-tax WACC	7.4%	11.2%


Selected WACC	9.3%

HPMT.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 HPMT.KL:

cost_of_equity (10.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.64) + 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.