ETWA.JK WACC - Weighted Average Cost of Capital

The WACC of Eterindo Wahanatama Tbk PT (ETWA.JK) is 6.9%.

The Cost of Equity of Eterindo Wahanatama Tbk PT (ETWA.JK) is 11.65%.

The Cost of Debt of Eterindo Wahanatama Tbk PT (ETWA.JK) is 5.60%.

	Range	Selected
Cost of equity	10.30% - 13.00%	11.65%
Tax rate	7.60% - 9.40%	8.50%
Cost of debt	4.00% - 7.20%	5.60%
WACC	5.5% - 8.3%	6.9%

WACC

ETWA.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.47	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	13.00%

Tax rate	7.60%	9.40%
Debt/Equity ratio	2.71	2.71
Cost of debt	4.00%	7.20%

After-tax WACC	5.5%	8.3%


Selected WACC	6.9%

ETWA.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 ETWA.JK:

cost_of_equity (11.65%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.47) + 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.