HIGHTEC.KL WACC - Weighted Average Cost of Capital

The WACC of Kumpulan H & L High-Tech Bhd (HIGHTEC.KL) is 6.9%.

The Cost of Equity of Kumpulan H & L High-Tech Bhd (HIGHTEC.KL) is 7.70%.

The Cost of Debt of Kumpulan H & L High-Tech Bhd (HIGHTEC.KL) is 4.80%.

	Range	Selected
Cost of equity	5.20% - 10.20%	7.70%
Tax rate	15.90% - 16.90%	16.40%
Cost of debt	4.70% - 4.90%	4.80%
WACC	4.9% - 8.8%	6.9%

WACC

HIGHTEC.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.21	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	10.20%

Tax rate	15.90%	16.90%
Debt/Equity ratio	0.29	0.29
Cost of debt	4.70%	4.90%

After-tax WACC	4.9%	8.8%


Selected WACC	6.9%

HIGHTEC.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 HIGHTEC.KL:

cost_of_equity (7.70%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (0.21) + 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.