2706.T
Broccoli Co Ltd
Price:  
1,495 
JPY
Volume:  
37,000
Japan | Entertainment

2706.T WACC - Weighted Average Cost of Capital

The WACC of Broccoli Co Ltd (2706.T) is 5.2%.

The Cost of Equity of Broccoli Co Ltd (2706.T) is 7.45%.
The Cost of Debt of Broccoli Co Ltd (2706.T) is 4.25%.

RangeSelected
Cost of equity6.2% - 8.7%7.45%
Tax rate31.3% - 31.6%31.45%
Cost of debt4.0% - 4.5%4.25%
WACC4.5% - 5.9%5.2%
WACC

2706.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.790.88
Additional risk adjustments0.0%0.5%
Cost of equity6.2%8.7%
Tax rate31.3%31.6%
Debt/Equity ratio
11
Cost of debt4.0%4.5%
After-tax WACC4.5%5.9%
Selected WACC5.2%

2706.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 2706.T:

cost_of_equity (7.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.