UNSP.JK WACC - Weighted Average Cost of Capital

The WACC of Bakrie Sumatera Plantations Tbk PT (UNSP.JK) is 7.8%.

The Cost of Equity of Bakrie Sumatera Plantations Tbk PT (UNSP.JK) is 48.80%.

The Cost of Debt of Bakrie Sumatera Plantations Tbk PT (UNSP.JK) is 5.50%.

	Range	Selected
Cost of equity	40.80% - 56.80%	48.80%
Tax rate	22.00% - 23.20%	22.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 9.5%	7.8%

WACC

UNSP.JK WACC calculation

Category	Low	High

Long-term bond rate	6.6%	7.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	4.34	5.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	40.80%	56.80%

Tax rate	22.00%	23.20%
Debt/Equity ratio	11.38	11.38
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	9.5%


Selected WACC	7.8%

UNSP.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 UNSP.JK:

cost_of_equity (48.80%) = risk_free_rate (6.85%) + equity_risk_premium (8.40%) * adjusted_beta (4.34) + 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.