The WACC of DD Holdings Co Ltd (3073.T) is 5.8%.
Range | Selected | |
Cost of equity | 6.2% - 8.9% | 7.55% |
Tax rate | 24.8% - 32.3% | 28.55% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.0% - 6.6% | 5.8% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.79 | 0.91 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 8.9% |
Tax rate | 24.8% | 32.3% |
Debt/Equity ratio | 0.62 | 0.62 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.0% | 6.6% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3073.T | DD Holdings Co Ltd | 0.62 | 0.76 | 0.53 |
2753.T | Amiyaki Tei Co Ltd | 0.04 | 0.54 | 0.53 |
3053.T | Pepper Food Service Co Ltd | 0 | 1.67 | 1.67 |
3193.T | Torikizoku Holdings Co Ltd | 0.09 | 1 | 0.94 |
3395.T | Saint Marc Holdings Co Ltd | 0.43 | 0.42 | 0.33 |
3561.T | Chikaranomoto Holdings Co Ltd | 0.06 | 0.88 | 0.85 |
7561.T | Hurxley Corp | 3.05 | 0.56 | 0.18 |
8163.T | SRS Holdings Co Ltd | 0.35 | 0.5 | 0.4 |
9828.T | Genki Sushi Co Ltd | 0.11 | 0.76 | 0.7 |
9979.T | Daisyo Corp | 0.58 | 0.53 | 0.37 |
Low | High | |
Unlevered beta | 0.48 | 0.6 |
Relevered beta | 0.69 | 0.87 |
Adjusted relevered beta | 0.79 | 0.91 |
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 3073.T:
cost_of_equity (7.55%) = 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.