The WACC of Tiphone Mobile Indonesia Tbk PT (TELE.JK) is 8.8%.
| Range | Selected | |
| Cost of equity | 148.20% - 274.30% | 211.25% |
| Tax rate | 0.30% - 8.60% | 4.45% |
| Cost of debt | 4.00% - 7.70% | 5.85% |
| WACC | 6.3% - 11.3% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 6.6% | 7.1% |
| Equity market risk premium | 7.9% | 8.9% |
| Adjusted beta | 17.97 | 30.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 148.20% | 274.30% |
| Tax rate | 0.30% | 8.60% |
| Debt/Equity ratio | 61.18 | 61.18 |
| Cost of debt | 4.00% | 7.70% |
| After-tax WACC | 6.3% | 11.3% |
| Selected WACC | 8.8% | |
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 TELE.JK:
cost_of_equity (211.25%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (17.97) + 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.