HMSP.JK WACC - Weighted Average Cost of Capital

The WACC of Hanjaya Mandala Sampoerna Tbk PT (HMSP.JK) is 13.7%.

The Cost of Equity of Hanjaya Mandala Sampoerna Tbk PT (HMSP.JK) is 13.80%.

The Cost of Debt of Hanjaya Mandala Sampoerna Tbk PT (HMSP.JK) is 5.50%.

	Range	Selected
Cost of equity	12.40% - 15.20%	13.80%
Tax rate	22.70% - 23.30%	23.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	12.3% - 15.2%	13.7%

WACC

HMSP.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.73	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	15.20%

Tax rate	22.70%	23.30%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	7.00%

After-tax WACC	12.3%	15.2%


Selected WACC	13.7%

HMSP.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 HMSP.JK:

cost_of_equity (13.80%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.73) + 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.