3174.T
Happiness and D Co Ltd
Price:  
712 
JPY
Volume:  
2,200
Japan | Specialty Retail

3174.T WACC - Weighted Average Cost of Capital

The WACC of Happiness and D Co Ltd (3174.T) is 5.5%.

The Cost of Equity of Happiness and D Co Ltd (3174.T) is 8.75%.
The Cost of Debt of Happiness and D Co Ltd (3174.T) is 5.5%.

RangeSelected
Cost of equity4.9% - 12.6%8.75%
Tax rate15.2% - 30.7%22.95%
Cost of debt4.0% - 7.0%5.5%
WACC3.8% - 7.2%5.5%
WACC

3174.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.571.43
Additional risk adjustments0.0%0.5%
Cost of equity4.9%12.6%
Tax rate15.2%30.7%
Debt/Equity ratio
2.322.32
Cost of debt4.0%7.0%
After-tax WACC3.8%7.2%
Selected WACC5.5%

3174.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 3174.T:

cost_of_equity (8.75%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.57) + 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.