The WACC of AirAsia Indonesia Tbk PT (CMPP.JK) is 11.9%.
Range | Selected | |
Cost of equity | 18.6% - 28.2% | 23.4% |
Tax rate | 1.0% - 5.0% | 3% |
Cost of debt | 4.0% - 18.4% | 11.2% |
WACC | 5.3% - 18.5% | 11.9% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 1.52 | 2.32 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 18.6% | 28.2% |
Tax rate | 1.0% | 5.0% |
Debt/Equity ratio | 9.69 | 9.69 |
Cost of debt | 4.0% | 18.4% |
After-tax WACC | 5.3% | 18.5% |
Selected WACC | 11.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CMPP.JK | AirAsia Indonesia Tbk PT | 9.69 | 0.54 | 0.05 |
091810.KS | T'way Air Co Ltd | 1.19 | 0.48 | 0.22 |
298690.KS | Air Busan Co Ltd | 2.81 | 0.55 | 0.15 |
9206.T | Star Flyer Inc | 0.38 | 0.25 | 0.18 |
AAV.BK | Asia Aviation PCL | 2.92 | 1.43 | 0.37 |
AAX.KL | AirAsia X Bhd | 2.07 | 1.39 | 0.46 |
AQZ.AX | Alliance Aviation Services Ltd | 0.85 | 0.84 | 0.45 |
HELI.JK | Jaya Trishindo Tbk PT | 0.36 | 0.64 | 0.47 |
NOK.BK | Nok Airlines PCL | 23.35 | -1.45 | -0.06 |
REX.AX | Regional Express Holdings Ltd | 5.1 | 0.4 | 0.07 |
Low | High | |
Unlevered beta | 0.17 | 0.28 |
Relevered beta | 1.78 | 2.97 |
Adjusted relevered beta | 1.52 | 2.32 |
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 CMPP.JK:
cost_of_equity (23.40%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (1.52) + 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.