The WACC of Sumi Indo Kabel Tbk PT (IKBI.JK) is 13.6%.
Range | Selected | |
Cost of equity | 11.8% - 16.8% | 14.3% |
Tax rate | 21.3% - 26.8% | 24.05% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 11.2% - 16.0% | 13.6% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 0.65 | 1.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.8% | 16.8% |
Tax rate | 21.3% | 26.8% |
Debt/Equity ratio | 0.07 | 0.07 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 11.2% | 16.0% |
Selected WACC | 13.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
IKBI.JK | Sumi Indo Kabel Tbk PT | 0.07 | 0.53 | 0.51 |
010120.KS | LS Electric Co Ltd | 0.15 | 1.62 | 1.45 |
300750.SZ | Contemporary Amperex Technology Co Ltd | 0.17 | 1.3 | 1.14 |
600580.SS | Wolong Electric Group Co Ltd | 0.23 | 1.52 | 1.29 |
6504.T | Fuji Electric Co Ltd | 0.1 | 1.53 | 1.42 |
6594.T | Nidec Corp | 0.2 | 1.02 | 0.89 |
JECC.JK | Jembo Cable Company Tbk PT | 1.82 | 0.94 | 0.39 |
KBLI.JK | KMI Wire and Cable Tbk PT | 0 | 0.21 | 0.21 |
TBMS.JK | Tembaga Mulia Semanan Tbk PT | 0.67 | 0.24 | 0.16 |
VOKS.JK | Voksel Electric Tbk PT | 0.86 | 0.44 | 0.26 |
Low | High | |
Unlevered beta | 0.46 | 0.99 |
Relevered beta | 0.48 | 1.04 |
Adjusted relevered beta | 0.65 | 1.03 |
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 IKBI.JK:
cost_of_equity (14.30%) = 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.