2971.T WACC - Weighted Average Cost of Capital
The WACC of Escon Japan Reit Investment Corp (2971.T) is 5.0%.
| Range | Selected | |
| Cost of equity | 4.7% - 6.4% | 5.55% |
| Tax rate | 0.1% - 0.1% | 0.1% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.4% - 5.6% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.55 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.7% | 6.4% |
| Tax rate | 0.1% | 0.1% |
| Debt/Equity ratio | 0.72 | 0.72 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.4% | 5.6% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2971.T | Escon Japan Reit Investment Corp | 0.72 | 0.38 | 0.22 |
| 3296.T | Nippon REIT Investment Corp | 0.82 | 0.29 | 0.16 |
| 3459.T | Samty Residential Investment Corp | 1.1 | 0.34 | 0.16 |
| 3468.T | Star Asia Investment Corp | 0.77 | 0.34 | 0.19 |
| 3470.T | Marimo Regional Revitalization REIT Inc | 1.09 | 0.39 | 0.19 |
| 3488.T | Xymax Reit Investment Corp | 0.69 | 0.34 | 0.2 |
| 3492.T | Takara Leben Real Estate Investment Corp | 0.92 | 0.4 | 0.21 |
| 8956.T | Premier Investment Corp | 0.78 | 0.26 | 0.15 |
| 8957.T | Tokyu REIT Inc | 0.57 | 0.43 | 0.27 |
| 8966.T | Heiwa Real Estate REIT Inc | 0.65 | 0.36 | 0.22 |
| Low | High | |
| Unlevered beta | 0.19 | 0.2 |
| Relevered beta | 0.33 | 0.34 |
| Adjusted relevered beta | 0.55 | 0.56 |
2971.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 2971.T:
cost_of_equity (5.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.55) + 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.