HUPSENG.KL WACC - Weighted Average Cost of Capital

The WACC of Hup Seng Industries Bhd (HUPSENG.KL) is 9.2%.

The Cost of Equity of Hup Seng Industries Bhd (HUPSENG.KL) is 9.25%.

The Cost of Debt of Hup Seng Industries Bhd (HUPSENG.KL) is 5.50%.

	Range	Selected
Cost of equity	8.00% - 10.50%	9.25%
Tax rate	25.80% - 26.50%	26.15%
Cost of debt	4.40% - 6.60%	5.50%
WACC	8.0% - 10.4%	9.2%

WACC

HUPSENG.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.61	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	10.50%

Tax rate	25.80%	26.50%
Debt/Equity ratio	0	0
Cost of debt	4.40%	6.60%

After-tax WACC	8.0%	10.4%


Selected WACC	9.2%

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 (9.25%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.61) + 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.