NPC.KL WACC - Weighted Average Cost of Capital

The WACC of NPC Resources Bhd (NPC.KL) is 8.3%.

The Cost of Equity of NPC Resources Bhd (NPC.KL) is 11.70%.

The Cost of Debt of NPC Resources Bhd (NPC.KL) is 6.05%.

	Range	Selected
Cost of equity	9.80% - 13.60%	11.70%
Tax rate	38.30% - 42.90%	40.60%
Cost of debt	6.00% - 6.10%	6.05%
WACC	7.3% - 9.4%	8.3%

WACC

NPC.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.87	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	13.60%

Tax rate	38.30%	42.90%
Debt/Equity ratio	0.71	0.71
Cost of debt	6.00%	6.10%

After-tax WACC	7.3%	9.4%


Selected WACC	8.3%

NPC.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 NPC.KL:

cost_of_equity (11.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.87) + 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.