PPRO.JK WACC - Weighted Average Cost of Capital

The WACC of PP Properti Tbk PT (PPRO.JK) is 11.5%.

The Cost of Equity of PP Properti Tbk PT (PPRO.JK) is 12.75%.

The Cost of Debt of PP Properti Tbk PT (PPRO.JK) is 11.20%.

	Range	Selected
Cost of equity	10.90% - 14.60%	12.75%
Tax rate	0.70% - 2.20%	1.45%
Cost of debt	4.00% - 18.40%	11.20%
WACC	6.1% - 17.0%	11.5%

WACC

PPRO.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.55	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.60%

Tax rate	0.70%	2.20%
Debt/Equity ratio	2.24	2.24
Cost of debt	4.00%	18.40%

After-tax WACC	6.1%	17.0%


Selected WACC	11.5%

PPRO.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 PPRO.JK:

cost_of_equity (12.75%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.55) + 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.