SMRA.JK WACC - Weighted Average Cost of Capital

The WACC of Summarecon Agung Tbk PT (SMRA.JK) is 7.9%.

The Cost of Equity of Summarecon Agung Tbk PT (SMRA.JK) is 13.90%.

The Cost of Debt of Summarecon Agung Tbk PT (SMRA.JK) is 5.50%.

	Range	Selected
Cost of equity	12.30% - 15.50%	13.90%
Tax rate	0.40% - 0.80%	0.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.4% - 9.4%	7.9%

WACC

SMRA.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.73	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	15.50%

Tax rate	0.40%	0.80%
Debt/Equity ratio	2.52	2.52
Cost of debt	4.00%	7.00%

After-tax WACC	6.4%	9.4%


Selected WACC	7.9%

SMRA.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 SMRA.JK:

cost_of_equity (13.90%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.73) + 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.