The WACC of Suparma Tbk PT (SPMA.JK) is 11.7%.
Range | Selected | |
Cost of equity | 14.4% - 20.3% | 17.35% |
Tax rate | 22.0% - 22.1% | 22.05% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 9.5% - 13.9% | 11.7% |
Category | Low | High |
Long-term bond rate | 6.6% | 7.1% |
Equity market risk premium | 7.9% | 8.9% |
Adjusted beta | 0.98 | 1.43 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.4% | 20.3% |
Tax rate | 22.0% | 22.1% |
Debt/Equity ratio | 0.76 | 0.76 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 9.5% | 13.9% |
Selected WACC | 11.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SPMA.JK | Suparma Tbk PT | 0.76 | 0.3 | 0.19 |
1202.SR | Middle East Company for Manufacturing and Producing Paper SJSC | 0.29 | 1.58 | 1.29 |
300703.SZ | Cre8 Direct Ningbo Co Ltd | 0.16 | 1.32 | 1.17 |
3896.T | Awa Paper & Technological Company Inc | 3.29 | 0.71 | 0.2 |
ANDHRAPAP.NS | Andhra Paper Ltd | 0.07 | 1.05 | 1 |
DHC.VN | DongHai of Bentre JSC | 0.31 | 1.34 | 1.08 |
INRU.JK | Toba Pulp Lestari Tbk PT | 3.95 | 0.75 | 0.18 |
MWY.AX | Midway Ltd | 0.22 | 0.44 | 0.37 |
PDMJEPAPER.NS | Pudumjee Paper Products Ltd | 0.02 | 1.55 | 1.53 |
TKIM.JK | Pabrik Kertas Tjiwi Kimia Tbk PT | 0.85 | 1.28 | 0.77 |
Low | High | |
Unlevered beta | 0.61 | 1.03 |
Relevered beta | 0.97 | 1.64 |
Adjusted relevered beta | 0.98 | 1.43 |
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 SPMA.JK:
cost_of_equity (17.35%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.98) + 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.