ALKA.JK WACC - Weighted Average Cost of Capital

The WACC of Alakasa Industrindo Tbk PT (ALKA.JK) is 11.6%.

The Cost of Equity of Alakasa Industrindo Tbk PT (ALKA.JK) is 11.55%.

The Cost of Debt of Alakasa Industrindo Tbk PT (ALKA.JK) is 6.90%.

	Range	Selected
Cost of equity	9.80% - 13.30%	11.55%
Tax rate	2.20% - 9.10%	5.65%
Cost of debt	4.00% - 9.80%	6.90%
WACC	9.8% - 13.3%	11.6%

WACC

ALKA.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.41	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	13.30%

Tax rate	2.20%	9.10%
Debt/Equity ratio	0	0
Cost of debt	4.00%	9.80%

After-tax WACC	9.8%	13.3%


Selected WACC	11.6%

ALKA.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 ALKA.JK:

cost_of_equity (11.55%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.41) + 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.