CITY.JK WACC - Weighted Average Cost of Capital

The WACC of Natura City Developments Tbk PT (CITY.JK) is 10.8%.

The Cost of Equity of Natura City Developments Tbk PT (CITY.JK) is 11.30%.

The Cost of Debt of Natura City Developments Tbk PT (CITY.JK) is 7.20%.

	Range	Selected
Cost of equity	9.40% - 13.20%	11.30%
Tax rate	2.40% - 6.50%	4.45%
Cost of debt	7.20% - 7.20%	7.20%
WACC	9.1% - 12.4%	10.8%

WACC

CITY.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.36	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.20%

Tax rate	2.40%	6.50%
Debt/Equity ratio	0.15	0.15
Cost of debt	7.20%	7.20%

After-tax WACC	9.1%	12.4%


Selected WACC	10.8%

CITY.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 CITY.JK:

cost_of_equity (11.30%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.36) + 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.