INAF.JK
Indofarma Tbk PT
Price:  
126 
IDR
Volume:  
222,800
Indonesia | Pharmaceuticals

INAF.JK WACC - Weighted Average Cost of Capital

The WACC of Indofarma Tbk PT (INAF.JK) is 8.2%.

The Cost of Equity of Indofarma Tbk PT (INAF.JK) is 15.65%.
The Cost of Debt of Indofarma Tbk PT (INAF.JK) is 5.6%.

RangeSelected
Cost of equity14.4% - 16.9%15.65%
Tax rate22.0% - 23.2%22.6%
Cost of debt4.0% - 7.2%5.6%
WACC7.0% - 9.4%8.2%
WACC

INAF.JK WACC calculation

CategoryLowHigh
Long-term bond rate6.6%7.1%
Equity market risk premium7.9%8.9%
Adjusted beta0.981.04
Additional risk adjustments0.0%0.5%
Cost of equity14.4%16.9%
Tax rate22.0%23.2%
Debt/Equity ratio
1.891.89
Cost of debt4.0%7.2%
After-tax WACC7.0%9.4%
Selected WACC8.2%

INAF.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 INAF.JK:

cost_of_equity (15.65%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.98) + 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.