THPLANT.KL WACC - Weighted Average Cost of Capital

The WACC of TH Plantations Bhd (THPLANT.KL) is 7.2%.

The Cost of Equity of TH Plantations Bhd (THPLANT.KL) is 13.55%.

The Cost of Debt of TH Plantations Bhd (THPLANT.KL) is 5.60%.

	Range	Selected
Cost of equity	11.60% - 15.50%	13.55%
Tax rate	30.10% - 33.80%	31.95%
Cost of debt	5.50% - 5.70%	5.60%
WACC	6.5% - 7.8%	7.2%

WACC

THPLANT.KL WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.14	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	15.50%

Tax rate	30.10%	33.80%
Debt/Equity ratio	1.92	1.92
Cost of debt	5.50%	5.70%

After-tax WACC	6.5%	7.8%


Selected WACC	7.2%

THPLANT.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 THPLANT.KL:

cost_of_equity (13.55%) = risk_free_rate (4.05%) + equity_risk_premium (7.35%) * adjusted_beta (1.14) + 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.