HMSP.JK WACC - Weighted Average Cost of Capital

The WACC of Hanjaya Mandala Sampoerna Tbk PT (HMSP.JK) is 13.4%.

The Cost of Equity of Hanjaya Mandala Sampoerna Tbk PT (HMSP.JK) is 13.50%.

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

	Range	Selected
Cost of equity	11.80% - 15.20%	13.50%
Tax rate	22.70% - 23.30%	23.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.7% - 15.1%	13.4%

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	0.65	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	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	11.7%	15.1%


Selected WACC	13.4%

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 (13.50%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.65) + 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.