NIRO.JK WACC - Weighted Average Cost of Capital

The WACC of City Retail Developments Tbk PT (NIRO.JK) is 8.0%.

The Cost of Equity of City Retail Developments Tbk PT (NIRO.JK) is 14.90%.

The Cost of Debt of City Retail Developments Tbk PT (NIRO.JK) is 5.50%.

	Range	Selected
Cost of equity	9.90% - 19.90%	14.90%
Tax rate	4.20% - 6.40%	5.30%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.6% - 10.3%	8.0%

WACC

NIRO.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.42	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	19.90%

Tax rate	4.20%	6.40%
Debt/Equity ratio	2.52	2.52
Cost of debt	4.00%	7.00%

After-tax WACC	5.6%	10.3%


Selected WACC	8.0%

NIRO.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 NIRO.JK:

cost_of_equity (14.90%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.42) + 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.