MAIN.JK WACC - Weighted Average Cost of Capital

The WACC of Malindo Feedmill Tbk PT (MAIN.JK) is 10.0%.

The Cost of Equity of Malindo Feedmill Tbk PT (MAIN.JK) is 16.35%.

The Cost of Debt of Malindo Feedmill Tbk PT (MAIN.JK) is 5.50%.

	Range	Selected
Cost of equity	12.80% - 19.90%	16.35%
Tax rate	22.50% - 31.40%	26.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.8% - 12.2%	10.0%

WACC

MAIN.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.79	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	19.90%

Tax rate	22.50%	31.40%
Debt/Equity ratio	1.05	1.05
Cost of debt	4.00%	7.00%

After-tax WACC	7.8%	12.2%


Selected WACC	10.0%

MAIN.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 MAIN.JK:

cost_of_equity (16.35%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.79) + 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.