The WACC of Chuco Co Ltd (2139.T) is 5.1%.
Range | Selected | |
Cost of equity | 5.0% - 7.0% | 6% |
Tax rate | 29.9% - 37.6% | 33.75% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.4% - 5.8% | 5.1% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.59 | 0.64 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 7.0% |
Tax rate | 29.9% | 37.6% |
Debt/Equity ratio | 0.38 | 0.38 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.4% | 5.8% |
Selected WACC | 5.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2139.T | Chuco Co Ltd | 0.38 | 0.24 | 0.19 |
2164.T | Chiikishinbunsha Co Ltd | 0.22 | 0.77 | 0.68 |
2341.T | Arbeit-Times Co Ltd | 0 | 0.42 | 0.42 |
2376.T | SCiNEX Corp | 0.6 | 0.35 | 0.25 |
3560.T | Hobonichi Co Ltd | 0 | 0.03 | 0.03 |
6176.T | Brangista Inc | 0.04 | 0.93 | 0.91 |
9475.T | Shobunsha Holdings Inc | 0.09 | 0.34 | 0.33 |
9476.T | Chuokeizai Sha Holdings Inc | 0.18 | 0.33 | 0.3 |
9478.T | SE Holdings and Incubations Co Ltd | 0.61 | 0.71 | 0.51 |
9479.T | Impress Holdings Inc | 0.07 | 0.37 | 0.35 |
Low | High | |
Unlevered beta | 0.31 | 0.38 |
Relevered beta | 0.39 | 0.46 |
Adjusted relevered beta | 0.59 | 0.64 |
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 2139.T:
cost_of_equity (6.00%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.