JHM.KL WACC - Weighted Average Cost of Capital

The WACC of JHM Consolidation Bhd (JHM.KL) is 7.8%.

The Cost of Equity of JHM Consolidation Bhd (JHM.KL) is 9.50%.

The Cost of Debt of JHM Consolidation Bhd (JHM.KL) is 5.75%.

	Range	Selected
Cost of equity	7.50% - 11.50%	9.50%
Tax rate	24.70% - 27.90%	26.30%
Cost of debt	4.50% - 7.00%	5.75%
WACC	6.2% - 9.5%	7.8%

WACC

JHM.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.54	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	11.50%

Tax rate	24.70%	27.90%
Debt/Equity ratio	0.46	0.46
Cost of debt	4.50%	7.00%

After-tax WACC	6.2%	9.5%


Selected WACC	7.8%

JHM.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 JHM.KL:

cost_of_equity (9.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.54) + 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.