KPPROP.KL WACC - Weighted Average Cost of Capital

The WACC of Kerjaya Prospek Property Bhd (KPPROP.KL) is 7.3%.

The Cost of Equity of Kerjaya Prospek Property Bhd (KPPROP.KL) is 7.45%.

The Cost of Debt of Kerjaya Prospek Property Bhd (KPPROP.KL) is 9.80%.

	Range	Selected
Cost of equity	6.30% - 8.60%	7.45%
Tax rate	24.30% - 26.90%	25.60%
Cost of debt	4.00% - 15.60%	9.80%
WACC	4.0% - 10.5%	7.3%

WACC

KPPROP.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.37	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.60%

Tax rate	24.30%	26.90%
Debt/Equity ratio	2.33	2.33
Cost of debt	4.00%	15.60%

After-tax WACC	4.0%	10.5%


Selected WACC	7.3%

KPPROP.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 KPPROP.KL:

cost_of_equity (7.45%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.37) + 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.