ADRO.JK WACC - Weighted Average Cost of Capital
The WACC of Adaro Energy Tbk PT (ADRO.JK) is 14.5%.
| Range | Selected | |
| Cost of equity | 14.9% - 17.7% | 16.3% |
| Tax rate | 25.7% - 29.5% | 27.6% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 13.1% - 15.8% | 14.5% |
| Category | Low | High |
| Long-term bond rate | 6.6% | 7.1% |
| Equity market risk premium | 7.9% | 8.9% |
| Adjusted beta | 1.05 | 1.14 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.9% | 17.7% |
| Tax rate | 25.7% | 29.5% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 13.1% | 15.8% |
| Selected WACC | 14.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ADRO.JK | Adaro Energy Tbk PT | 0.17 | 0.87 | 0.78 |
| BUMI.JK | Bumi Resources Tbk PT | 0.18 | 1.52 | 1.34 |
| BYAN.JK | Bayan Resources Tbk PT | 0.01 | 0.27 | 0.26 |
| DSSA.JK | Dian Swastatika Sentosa Tbk PT | 0.05 | 1.23 | 1.19 |
| GEMS.JK | Golden Energy Mines Tbk PT | 0.09 | 1.36 | 1.28 |
| GTBO.JK | Garda Tujuh Buana Tbk PT | 0.02 | 1.09 | 1.07 |
| HRUM.JK | Harum Energy Tbk PT | 0.46 | 1.42 | 1.07 |
| INDY.JK | Indika Energy Tbk PT | 2.5 | 1.46 | 0.52 |
| ITMG.JK | Indo Tambangraya Megah Tbk PT | 0.05 | 0.49 | 0.48 |
| MBAP.JK | Mitrabara Adiperdana Tbk PT | 0.04 | 1.12 | 1.09 |
| Low | High | |
| Unlevered beta | 0.95 | 1.08 |
| Relevered beta | 1.07 | 1.21 |
| Adjusted relevered beta | 1.05 | 1.14 |
ADRO.JK'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 ADRO.JK:
cost_of_equity (16.30%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (1.05) + 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.