LPI.KL
Lpi Capital Bhd
Price:  
14.18 
MYR
Volume:  
237,600.00
Malaysia | Insurance
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LPI.KL WACC - Weighted Average Cost of Capital

The WACC of Lpi Capital Bhd (LPI.KL) is 7.7%.

The Cost of Equity of Lpi Capital Bhd (LPI.KL) is 7.70%.
The Cost of Debt of Lpi Capital Bhd (LPI.KL) is 5.00%.

Range Selected
Cost of equity 6.90% - 8.50% 7.70%
Tax rate 20.90% - 21.60% 21.25%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.9% - 8.4% 7.7%
WACC

LPI.KL WACC calculation

Category Low High
Long-term bond rate 3.8% 4.3%
Equity market risk premium 6.9% 7.8%
Adjusted beta 0.45 0.47
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 8.50%
Tax rate 20.90% 21.60%
Debt/Equity ratio 0.01 0.01
Cost of debt 5.00% 5.00%
After-tax WACC 6.9% 8.4%
Selected WACC 7.7%

LPI.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 LPI.KL:

cost_of_equity (7.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.45) + 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.