The WACC of Indo Komoditi Korpora Tbk PT (INCF.JK) is 6.7%.
| Range | Selected | |
| Cost of equity | 21.20% - 45.00% | 33.10% |
| Tax rate | 28.20% - 44.80% | 36.50% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 5.0% - 8.5% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 6.6% | 7.1% |
| Equity market risk premium | 7.9% | 8.9% |
| Adjusted beta | 1.86 | 4.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.20% | 45.00% |
| Tax rate | 28.20% | 44.80% |
| Debt/Equity ratio | 7.84 | 7.84 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 5.0% | 8.5% |
| Selected WACC | 6.7% | |
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 INCF.JK:
cost_of_equity (33.10%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (1.86) + 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.