2681.T WACC - Weighted Average Cost of Capital

The WACC of Geo Holdings Corp (2681.T) is 4.2%.

The Cost of Equity of Geo Holdings Corp (2681.T) is 6.75%.

The Cost of Debt of Geo Holdings Corp (2681.T) is 4.25%.

	Range	Selected
Cost of equity	5.40% - 8.10%	6.75%
Tax rate	42.80% - 48.80%	45.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.6% - 4.8%	4.2%

WACC

2681.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.66	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.10%

Tax rate	42.80%	48.80%
Debt/Equity ratio	1.33	1.33
Cost of debt	4.00%	4.50%

After-tax WACC	3.6%	4.8%


Selected WACC	4.2%

2681.T'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 2681.T:

cost_of_equity (6.75%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.66) + 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.