ECII.JK WACC - Weighted Average Cost of Capital

The WACC of Electronic City Indonesia Tbk PT (ECII.JK) is 9.7%.

The Cost of Equity of Electronic City Indonesia Tbk PT (ECII.JK) is 10.60%.

The Cost of Debt of Electronic City Indonesia Tbk PT (ECII.JK) is 7.10%.

	Range	Selected
Cost of equity	9.70% - 11.50%	10.60%
Tax rate	7.20% - 14.70%	10.95%
Cost of debt	4.00% - 10.20%	7.10%
WACC	8.5% - 10.9%	9.7%

WACC

ECII.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.4	0.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	11.50%

Tax rate	7.20%	14.70%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.00%	10.20%

After-tax WACC	8.5%	10.9%


Selected WACC	9.7%

ECII.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 ECII.JK:

cost_of_equity (10.60%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.4) + 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.