FIRE.JK
Alfa Energi Investama Tbk PT
Price:  
81 
IDR
Volume:  
14,141,200
Indonesia | Oil, Gas & Consumable Fuels

FIRE.JK WACC - Weighted Average Cost of Capital

The WACC of Alfa Energi Investama Tbk PT (FIRE.JK) is 14.8%.

The Cost of Equity of Alfa Energi Investama Tbk PT (FIRE.JK) is 15.1%.
The Cost of Debt of Alfa Energi Investama Tbk PT (FIRE.JK) is 5.5%.

RangeSelected
Cost of equity13.4% - 16.8%15.1%
Tax rate23.9% - 31.8%27.85%
Cost of debt4.0% - 7.0%5.5%
WACC13.1% - 16.5%14.8%
WACC

FIRE.JK WACC calculation

CategoryLowHigh
Long-term bond rate6.6%7.1%
Equity market risk premium7.9%8.9%
Adjusted beta0.861.03
Additional risk adjustments0.0%0.5%
Cost of equity13.4%16.8%
Tax rate23.9%31.8%
Debt/Equity ratio
0.020.02
Cost of debt4.0%7.0%
After-tax WACC13.1%16.5%
Selected WACC14.8%

FIRE.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 FIRE.JK:

cost_of_equity (15.10%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.86) + 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.