CARS.JK WACC - Weighted Average Cost of Capital

The WACC of Industri Dan Perdagangan Bintraco Dharma Tbk PT (CARS.JK) is 9.1%.

The Cost of Equity of Industri Dan Perdagangan Bintraco Dharma Tbk PT (CARS.JK) is 15.25%.

The Cost of Debt of Industri Dan Perdagangan Bintraco Dharma Tbk PT (CARS.JK) is 5.50%.

	Range	Selected
Cost of equity	11.70% - 18.80%	15.25%
Tax rate	24.10% - 30.50%	27.30%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.0% - 11.2%	9.1%

WACC

CARS.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.65	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	18.80%

Tax rate	24.10%	30.50%
Debt/Equity ratio	1.19	1.19
Cost of debt	4.00%	7.00%

After-tax WACC	7.0%	11.2%


Selected WACC	9.1%

CARS.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 CARS.JK:

cost_of_equity (15.25%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.65) + 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.