PTBA.JK WACC - Weighted Average Cost of Capital

The WACC of Bukit Asam Tbk PT (PTBA.JK) is 13.5%.

The Cost of Equity of Bukit Asam Tbk PT (PTBA.JK) is 14.10%.

The Cost of Debt of Bukit Asam Tbk PT (PTBA.JK) is 5.50%.

	Range	Selected
Cost of equity	12.80% - 15.40%	14.10%
Tax rate	21.90% - 22.60%	22.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	12.2% - 14.7%	13.5%

WACC

PTBA.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.79	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	15.40%

Tax rate	21.90%	22.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	7.00%

After-tax WACC	12.2%	14.7%


Selected WACC	13.5%

PTBA.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 PTBA.JK:

cost_of_equity (14.10%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.79) + 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.