HSPLANT.KL WACC - Weighted Average Cost of Capital

The WACC of Hap Seng Plantations Holdings Bhd (HSPLANT.KL) is 10.0%.

The Cost of Equity of Hap Seng Plantations Holdings Bhd (HSPLANT.KL) is 10.25%.

The Cost of Debt of Hap Seng Plantations Holdings Bhd (HSPLANT.KL) is 4.65%.

	Range	Selected
Cost of equity	9.20% - 11.30%	10.25%
Tax rate	21.80% - 23.10%	22.45%
Cost of debt	4.40% - 4.90%	4.65%
WACC	8.9% - 11.0%	10.0%

WACC

HSPLANT.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.79	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.30%

Tax rate	21.80%	23.10%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.40%	4.90%

After-tax WACC	8.9%	11.0%


Selected WACC	10.0%

HSPLANT.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 HSPLANT.KL:

cost_of_equity (10.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.79) + 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.