BUMI.JK WACC - Weighted Average Cost of Capital

The WACC of Bumi Resources Tbk PT (BUMI.JK) is 10.6%.

The Cost of Equity of Bumi Resources Tbk PT (BUMI.JK) is 11.80%.

The Cost of Debt of Bumi Resources Tbk PT (BUMI.JK) is 5.50%.

	Range	Selected
Cost of equity	10.40% - 13.20%	11.80%
Tax rate	20.60% - 23.20%	21.90%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.3% - 11.9%	10.6%

WACC

BUMI.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.48	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	13.20%

Tax rate	20.60%	23.20%
Debt/Equity ratio	0.19	0.19
Cost of debt	4.00%	7.00%

After-tax WACC	9.3%	11.9%


Selected WACC	10.6%

BUMI.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 BUMI.JK:

cost_of_equity (11.80%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.48) + 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.