ITIC.JK
Indonesian Tobacco Tbk PT
Price:  
218 
IDR
Volume:  
75,600
Indonesia | Tobacco

ITIC.JK WACC - Weighted Average Cost of Capital

The WACC of Indonesian Tobacco Tbk PT (ITIC.JK) is 10.7%.

The Cost of Equity of Indonesian Tobacco Tbk PT (ITIC.JK) is 16.15%.
The Cost of Debt of Indonesian Tobacco Tbk PT (ITIC.JK) is 5%.

RangeSelected
Cost of equity14.2% - 18.1%16.15%
Tax rate26.1% - 26.9%26.5%
Cost of debt5.0% - 5.0%5%
WACC9.6% - 11.7%10.7%
WACC

ITIC.JK WACC calculation

CategoryLowHigh
Long-term bond rate6.6%7.1%
Equity market risk premium7.9%8.9%
Adjusted beta0.961.18
Additional risk adjustments0.0%0.5%
Cost of equity14.2%18.1%
Tax rate26.1%26.9%
Debt/Equity ratio
0.780.78
Cost of debt5.0%5.0%
After-tax WACC9.6%11.7%
Selected WACC10.7%

ITIC.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 ITIC.JK:

cost_of_equity (16.15%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.96) + 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.