PTRO.JK WACC - Weighted Average Cost of Capital

The WACC of Petrosea Tbk PT (PTRO.JK) is 13.1%.

The Cost of Equity of Petrosea Tbk PT (PTRO.JK) is 14.85%.

The Cost of Debt of Petrosea Tbk PT (PTRO.JK) is 5.50%.

	Range	Selected
Cost of equity	12.60% - 17.10%	14.85%
Tax rate	17.90% - 19.70%	18.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.0% - 15.2%	13.1%

WACC

PTRO.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.76	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	17.10%

Tax rate	17.90%	19.70%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.00%	7.00%

After-tax WACC	11.0%	15.2%


Selected WACC	13.1%

PTRO.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 PTRO.JK:

cost_of_equity (14.85%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.76) + 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.