HPPHB.KL
HPP Holdings Bhd
Price:  
0.39 
MYR
Volume:  
50,000.00
Malaysia | Containers & Packaging
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HPPHB.KL WACC - Weighted Average Cost of Capital

The WACC of HPP Holdings Bhd (HPPHB.KL) is 8.2%.

The Cost of Equity of HPP Holdings Bhd (HPPHB.KL) is 8.65%.
The Cost of Debt of HPP Holdings Bhd (HPPHB.KL) is 4.95%.

Range Selected
Cost of equity 6.90% - 10.40% 8.65%
Tax rate 25.80% - 26.80% 26.30%
Cost of debt 4.90% - 5.00% 4.95%
WACC 6.6% - 9.7% 8.2%
WACC

HPPHB.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.46 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.40%
Tax rate 25.80% 26.80%
Debt/Equity ratio 0.12 0.12
Cost of debt 4.90% 5.00%
After-tax WACC 6.6% 9.7%
Selected WACC 8.2%

HPPHB.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 HPPHB.KL:

cost_of_equity (8.65%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.46) + 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.