PWON.JK WACC - Weighted Average Cost of Capital

The WACC of Pakuwon Jati Tbk PT (PWON.JK) is 11.3%.

The Cost of Equity of Pakuwon Jati Tbk PT (PWON.JK) is 13.25%.

The Cost of Debt of Pakuwon Jati Tbk PT (PWON.JK) is 5.50%.

	Range	Selected
Cost of equity	11.90% - 14.60%	13.25%
Tax rate	0.90% - 1.00%	0.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.9% - 12.7%	11.3%

WACC

PWON.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.68	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	14.60%

Tax rate	0.90%	1.00%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.00%	7.00%

After-tax WACC	9.9%	12.7%


Selected WACC	11.3%

PWON.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 PWON.JK:

cost_of_equity (13.25%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.68) + 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.