The WACC of Gendai Agency Inc (2411.T) is 7.0%.
Range | Selected | |
Cost of equity | 5.9% - 9.1% | 7.5% |
Tax rate | 15.1% - 17.5% | 16.3% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.6% - 8.5% | 7.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.73 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.9% | 9.1% |
Tax rate | 15.1% | 17.5% |
Debt/Equity ratio | 0.14 | 0.14 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.6% | 8.5% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2411.T | Gendai Agency Inc | 0.14 | 0.33 | 0.29 |
2487.T | CDG Co Ltd | 0 | 0.3 | 0.3 |
3675.T | Cross Marketing Group Inc | 0.35 | 1.43 | 1.1 |
3929.T | Socialwire Co Ltd | 0.06 | 0.96 | 0.91 |
6045.T | Rentracks Co Ltd | 0.44 | 1.08 | 0.79 |
6081.T | Allied Architects Inc | 0.22 | 1.51 | 1.28 |
7036.T | eMnet Japan Co Ltd | 0 | 0.61 | 0.61 |
7050.T | Frontier International Inc | 0.04 | 0.42 | 0.4 |
7095.T | Macbee Planet Inc | 0.07 | 0.94 | 0.89 |
9466.T | Aidma Marketing Communication Corp | 0.15 | 0.47 | 0.42 |
Low | High | |
Unlevered beta | 0.53 | 0.83 |
Relevered beta | 0.6 | 0.93 |
Adjusted relevered beta | 0.73 | 0.95 |
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 2411.T:
cost_of_equity (7.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * 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.