PMMP.JK WACC - Weighted Average Cost of Capital

The WACC of Panca Mitra Multiperdana Tbk PT (PMMP.JK) is 10.9%.

The Cost of Equity of Panca Mitra Multiperdana Tbk PT (PMMP.JK) is 40.55%.

The Cost of Debt of Panca Mitra Multiperdana Tbk PT (PMMP.JK) is 13.80%.

	Range	Selected
Cost of equity	26.50% - 54.60%	40.55%
Tax rate	19.60% - 31.10%	25.35%
Cost of debt	4.00% - 23.60%	13.80%
WACC	4.1% - 17.7%	10.9%

WACC

PMMP.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	2.52	5.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	26.50%	54.60%

Tax rate	19.60%	31.10%
Debt/Equity ratio	25.14	25.14
Cost of debt	4.00%	23.60%

After-tax WACC	4.1%	17.7%


Selected WACC	10.9%

PMMP.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 PMMP.JK:

cost_of_equity (40.55%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (2.52) + 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.