The WACC of Fast Food Indonesia Tbk PT (FAST.JK) is 7.2%.
Range | Selected | |
Cost of equity | 10.8% - 12.5% | 11.65% |
Tax rate | 17.7% - 18.5% | 18.1% |
Cost of debt | 4.0% - 7.2% | 5.6% |
WACC | 6.0% - 8.3% | 7.2% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 0.53 | 0.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.8% | 12.5% |
Tax rate | 17.7% | 18.5% |
Debt/Equity ratio | 1.73 | 1.73 |
Cost of debt | 4.0% | 7.2% |
After-tax WACC | 6.0% | 8.3% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
FAST.JK | Fast Food Indonesia Tbk PT | 1.73 | 0.89 | 0.37 |
47.HK | Hop Hing Group Holdings Ltd | 1.1 | 0.22 | 0.12 |
52.HK | Fairwood Holdings Ltd | 1.59 | 0.29 | 0.13 |
538.HK | Ajisen (China) Holdings Ltd | 0.76 | 0.47 | 0.29 |
573.HK | Tao Heung Holdings Ltd | 1.82 | 0.39 | 0.16 |
6811.HK | Tai Hing Group Holdings Ltd | 1.08 | 0.22 | 0.12 |
MAPB.JK | Map Boga Adiperkasa Tbk PT | 0.18 | 0.14 | 0.12 |
OISHI.BK | Oishi Group PCL | 0.02 | -0.34 | -0.34 |
PTSP.JK | Pioneerindo Gourmet International Tbk PT | 0.39 | 0.25 | 0.19 |
PZZA.JK | Sarimelati Kencana Tbk PT | 1.13 | 0.04 | 0.02 |
Low | High | |
Unlevered beta | 0.12 | 0.14 |
Relevered beta | 0.3 | 0.33 |
Adjusted relevered beta | 0.53 | 0.55 |
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 FAST.JK:
cost_of_equity (11.65%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.53) + 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.