MLIA.JK WACC - Weighted Average Cost of Capital

The WACC of Mulia Industrindo Tbk PT (MLIA.JK) is 10.1%.

The Cost of Equity of Mulia Industrindo Tbk PT (MLIA.JK) is 11.90%.

The Cost of Debt of Mulia Industrindo Tbk PT (MLIA.JK) is 5.50%.

	Range	Selected
Cost of equity	11.10% - 12.70%	11.90%
Tax rate	21.80% - 22.10%	21.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.2% - 11.0%	10.1%

WACC

MLIA.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.57	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	12.70%

Tax rate	21.80%	22.10%
Debt/Equity ratio	0.3	0.3
Cost of debt	4.00%	7.00%

After-tax WACC	9.2%	11.0%


Selected WACC	10.1%

MLIA.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 MLIA.JK:

cost_of_equity (11.90%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.57) + 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.