INDY.JK
Indika Energy Tbk PT
Price:  
1,330 
IDR
Volume:  
5,206,700
Indonesia | Oil, Gas & Consumable Fuels

INDY.JK WACC - Weighted Average Cost of Capital

The WACC of Indika Energy Tbk PT (INDY.JK) is 10.6%.

The Cost of Equity of Indika Energy Tbk PT (INDY.JK) is 26.55%.
The Cost of Debt of Indika Energy Tbk PT (INDY.JK) is 5.5%.

RangeSelected
Cost of equity23.7% - 29.4%26.55%
Tax rate22.0% - 23.2%22.6%
Cost of debt4.0% - 7.0%5.5%
WACC9.0% - 12.2%10.6%
WACC

INDY.JK WACC calculation

CategoryLowHigh
Long-term bond rate6.6%7.1%
Equity market risk premium7.9%8.9%
Adjusted beta2.172.45
Additional risk adjustments0.0%0.5%
Cost of equity23.7%29.4%
Tax rate22.0%23.2%
Debt/Equity ratio
2.52.5
Cost of debt4.0%7.0%
After-tax WACC9.0%12.2%
Selected WACC10.6%

INDY.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 INDY.JK:

cost_of_equity (26.55%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (2.17) + 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.