HSSEB.KL WACC - Weighted Average Cost of Capital

The WACC of Hss Engineers Bhd (HSSEB.KL) is 8.5%.

The Cost of Equity of Hss Engineers Bhd (HSSEB.KL) is 9.35%.

The Cost of Debt of Hss Engineers Bhd (HSSEB.KL) is 4.90%.

	Range	Selected
Cost of equity	7.90% - 10.80%	9.35%
Tax rate	29.60% - 32.00%	30.80%
Cost of debt	4.50% - 5.30%	4.90%
WACC	7.3% - 9.8%	8.5%

WACC

HSSEB.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.6	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.80%

Tax rate	29.60%	32.00%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.50%	5.30%

After-tax WACC	7.3%	9.8%


Selected WACC	8.5%

HSSEB.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 HSSEB.KL:

cost_of_equity (9.35%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.6) + 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.