The WACC of Arwana Citramulia Tbk PT (ARNA.JK) is 12.7%.
Range | Selected | |
Cost of equity | 11.3% - 14.5% | 12.9% |
Tax rate | 22.0% - 22.0% | 22% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 11.1% - 14.3% | 12.7% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 0.6 | 0.78 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.3% | 14.5% |
Tax rate | 22.0% | 22.0% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 11.1% | 14.3% |
Selected WACC | 12.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ARNA.JK | Arwana Citramulia Tbk PT | 0.02 | 0.55 | 0.54 |
002790.SZ | Xiamen R&T Plumbing Technology Co Ltd | 0.04 | 1.76 | 1.72 |
603226.SS | Vohringer Home Technology Co Ltd | 0.04 | 1.1 | 1.06 |
603616.SS | Beijing Hanjian Heshan Pipeline Co Ltd | 0.27 | 1 | 0.83 |
AMFG.JK | Asahimas Flat Glass Tbk PT | 0.85 | 0.3 | 0.18 |
CAKK.JK | Cahayaputra Asa Keramik Tbk PT | 1.52 | 0.41 | 0.19 |
GREENLAM.NS | Greenlam Industries Ltd | 0.18 | 1.35 | 1.19 |
IKAI.JK | Intikeramik Alamasri Industri Tbk PT | 1.93 | 1.07 | 0.43 |
KIAS.JK | Keramika Indonesia Assosiasi Tbk PT | 0.13 | 0.36 | 0.33 |
TOTO.JK | Surya Toto Indonesia Tbk PT | 0.09 | 0.3 | 0.28 |
Low | High | |
Unlevered beta | 0.39 | 0.65 |
Relevered beta | 0.4 | 0.67 |
Adjusted relevered beta | 0.6 | 0.78 |
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 ARNA.JK:
cost_of_equity (12.90%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.6) + 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.