FITT.JK WACC - Weighted Average Cost of Capital

The WACC of Hotel Fitra International Tbk PT (FITT.JK) is 10.7%.

The Cost of Equity of Hotel Fitra International Tbk PT (FITT.JK) is 10.85%.

The Cost of Debt of Hotel Fitra International Tbk PT (FITT.JK) is 6.90%.

	Range	Selected
Cost of equity	9.80% - 11.90%	10.85%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	4.00% - 9.80%	6.90%
WACC	9.5% - 11.8%	10.7%

WACC

FITT.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.41	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	11.90%

Tax rate	0.40%	0.50%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	9.80%

After-tax WACC	9.5%	11.8%


Selected WACC	10.7%

FITT.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 FITT.JK:

cost_of_equity (10.85%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.41) + 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.