HUPSENG.KL WACC - Weighted Average Cost of Capital
The WACC of Hup Seng Industries Bhd (HUPSENG.KL) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.5% - 10.9% | 9.7% |
| Tax rate | 25.8% - 26.5% | 26.15% |
| Cost of debt | 4.4% - 6.7% | 5.55% |
| WACC | 8.5% - 10.9% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 0.69 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 10.9% |
| Tax rate | 25.8% | 26.5% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.4% | 6.7% |
| After-tax WACC | 8.5% | 10.9% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HUPSENG.KL | Hup Seng Industries Bhd | 0 | 1.1 | 1.1 |
| 3A.KL | Three-A Resources Bhd | 0.01 | 0.22 | 0.22 |
| AJI.KL | Ajinomoto Malaysia Bhd | 0 | 0.79 | 0.79 |
| COCOLND.KL | Cocoaland Holdings Bhd | 0 | 0.35 | 0.35 |
| JOHOTIN.KL | Johore Tin Bhd | 0.09 | 0.79 | 0.74 |
| KAWAN.KL | Kawan Food Bhd | 0.01 | 0.61 | 0.61 |
| OCB.KL | Ocb Bhd | 0.82 | -0.04 | -0.03 |
| OFI.KL | Oriental Food Industries Holdings Bhd | 0 | 0.64 | 0.63 |
| SDS.KL | SDS Group Bhd | 0.05 | 1.03 | 0.99 |
| TECGUAN.KL | Teck Guan Perdana Bhd | 0.28 | 0.53 | 0.44 |
| Low | High | |
| Unlevered beta | 0.54 | 0.68 |
| Relevered beta | 0.54 | 0.67 |
| Adjusted relevered beta | 0.69 | 0.78 |
HUPSENG.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 HUPSENG.KL:
cost_of_equity (9.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.69) + 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.