2780.T WACC - Weighted Average Cost of Capital

The WACC of Komehyo Holdings Co Ltd (2780.T) is 5.3%.

The Cost of Equity of Komehyo Holdings Co Ltd (2780.T) is 7.40%.

The Cost of Debt of Komehyo Holdings Co Ltd (2780.T) is 4.25%.

	Range	Selected
Cost of equity	5.50% - 9.30%	7.40%
Tax rate	31.00% - 32.50%	31.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.2% - 6.4%	5.3%

WACC

2780.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	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	9.30%

Tax rate	31.00%	32.50%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.00%	4.50%

After-tax WACC	4.2%	6.4%


Selected WACC	5.3%

2780.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 2780.T:

cost_of_equity (7.40%) = 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.