The WACC of Cikarang Listrindo Tbk PT (POWR.JK) is 9.0%.
Range | Selected | |
Cost of equity | 11.6% - 13.9% | 12.75% |
Tax rate | 28.3% - 29.9% | 29.1% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 7.9% - 10.1% | 9.0% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 0.63 | 0.71 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.6% | 13.9% |
Tax rate | 28.3% | 29.9% |
Debt/Equity ratio | 0.73 | 0.73 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 7.9% | 10.1% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
POWR.JK | Cikarang Listrindo Tbk PT | 0.73 | 0.29 | 0.19 |
1811.HK | CGN New Energy Holdings Co Ltd | 4.62 | 0.78 | 0.18 |
600011.SS | Huaneng Power International Inc | 2.83 | 0.87 | 0.29 |
600027.SS | Huadian Power International Corp Ltd | 2.01 | 0.78 | 0.32 |
600795.SS | Gd Power Development Co Ltd | 3.64 | 0.6 | 0.17 |
601991.SS | Datang International Power Generation Co Ltd | 3.23 | 0.99 | 0.3 |
KEEN.JK | Kencana Energi Lestari PT | 0.58 | 0.78 | 0.55 |
LAPD.JK | Leyand International Tbk PT | 0.49 | 1.96 | 1.45 |
MPOW.JK | MegaPower Makmur Tbk PT | 0.43 | 0.59 | 0.45 |
NTPC.NS | NTPC Ltd | 0.71 | 1.05 | 0.7 |
Low | High | |
Unlevered beta | 0.29 | 0.37 |
Relevered beta | 0.45 | 0.57 |
Adjusted relevered beta | 0.63 | 0.71 |
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 POWR.JK:
cost_of_equity (12.75%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.63) + 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.