IKBI.JK
Sumi Indo Kabel Tbk PT
Price:  
400 
IDR
Volume:  
42,700
Indonesia | Electrical Equipment

IKBI.JK WACC - Weighted Average Cost of Capital

The WACC of Sumi Indo Kabel Tbk PT (IKBI.JK) is 13.6%.

The Cost of Equity of Sumi Indo Kabel Tbk PT (IKBI.JK) is 14.3%.
The Cost of Debt of Sumi Indo Kabel Tbk PT (IKBI.JK) is 5.5%.

RangeSelected
Cost of equity11.8% - 16.8%14.3%
Tax rate21.3% - 26.8%24.05%
Cost of debt4.0% - 7.0%5.5%
WACC11.2% - 16.0%13.6%
WACC

IKBI.JK WACC calculation

CategoryLowHigh
Long-term bond rate6.6%7.1%
Equity market risk premium7.9%8.9%
Adjusted beta0.651.03
Additional risk adjustments0.0%0.5%
Cost of equity11.8%16.8%
Tax rate21.3%26.8%
Debt/Equity ratio
0.070.07
Cost of debt4.0%7.0%
After-tax WACC11.2%16.0%
Selected WACC13.6%

IKBI.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 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.