THHEAVY.KL WACC - Weighted Average Cost of Capital

The WACC of TH Heavy Engineering Bhd (THHEAVY.KL) is 7.6%.

The Cost of Equity of TH Heavy Engineering Bhd (THHEAVY.KL) is 9.90%.

The Cost of Debt of TH Heavy Engineering Bhd (THHEAVY.KL) is 5.50%.

	Range	Selected
Cost of equity	7.80% - 12.00%	9.90%
Tax rate	0.20% - 0.70%	0.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.8% - 9.4%	7.6%

WACC

THHEAVY.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.58	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	12.00%

Tax rate	0.20%	0.70%
Debt/Equity ratio	1.05	1.05
Cost of debt	4.00%	7.00%

After-tax WACC	5.8%	9.4%


Selected WACC	7.6%

THHEAVY.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 THHEAVY.KL:

cost_of_equity (9.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.58) + 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.