3125.T WACC - Weighted Average Cost of Capital
The WACC of Shinnaigai Textile Ltd (3125.T) is 5.2%.
| Range | Selected | |
| Cost of equity | 4.0% - 7.0% | 5.5% |
| Tax rate | 30.6% - 30.7% | 30.65% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 3.8% - 6.6% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 0.8% | 1.2% |
| Equity market risk premium | 5.4% | 6.4% |
| Adjusted beta | 0.5 | 0.74 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 4.0% | 7.0% |
| Tax rate | 30.6% | 30.7% |
| Debt/Equity ratio | 0.22 | 0.22 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 3.8% | 6.6% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3125.T | Shinnaigai Textile Ltd | 0.22 | 1 | 0.87 |
| 3123.T | Saibo Co Ltd | 2.01 | 0.47 | 0.2 |
| 3204.T | Toabo Corp | 3.67 | 0.27 | 0.08 |
| 3409.T | Kitanihon Spinning Co Ltd | 0.11 | 0.56 | 0.52 |
| 3515.T | Fuji Corp | 0.21 | 0.71 | 0.62 |
| 3524.T | Nitto Seimo Co Ltd | 4.54 | 0.51 | 0.12 |
| 3571.T | Sotoh Co Ltd | 0.07 | 0.49 | 0.46 |
| 3578.T | Soko Seiren Co Ltd | 0.32 | 1.17 | 0.96 |
| 3600.T | Fujix Ltd | 1.16 | 0.23 | 0.13 |
| 530201.BO | Kallam Textiles Ltd | 13.66 | 0.69 | 0.07 |
| Low | High | |
| Unlevered beta | 0.17 | 0.48 |
| Relevered beta | 0.25 | 0.61 |
| Adjusted relevered beta | 0.5 | 0.74 |
3125.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 3125.T:
cost_of_equity (5.50%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (0.5) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.