SMCB.JK WACC - Weighted Average Cost of Capital

The WACC of Solusi Bangun Indonesia Tbk PT (SMCB.JK) is 13.0%.

The Cost of Equity of Solusi Bangun Indonesia Tbk PT (SMCB.JK) is 15.80%.

The Cost of Debt of Solusi Bangun Indonesia Tbk PT (SMCB.JK) is 5.50%.

	Range	Selected
Cost of equity	13.70% - 17.90%	15.80%
Tax rate	27.90% - 30.30%	29.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.2% - 14.9%	13.0%

WACC

SMCB.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.9	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	17.90%

Tax rate	27.90%	30.30%
Debt/Equity ratio	0.31	0.31
Cost of debt	4.00%	7.00%

After-tax WACC	11.2%	14.9%


Selected WACC	13.0%

SMCB.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 SMCB.JK:

cost_of_equity (15.80%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.9) + 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.