The WACC of Dream Vision Co Ltd (3185.T) is 6.6%.
Range | Selected | |
Cost of equity | 5.9% - 8.8% | 7.35% |
Tax rate | 1.8% - 2.7% | 2.25% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.2% - 8.1% | 6.6% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.74 | 0.9 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.9% | 8.8% |
Tax rate | 1.8% | 2.7% |
Debt/Equity ratio | 0.61 | 0.61 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.2% | 8.1% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3185.T | Dream Vision Co Ltd | 0.61 | 0.04 | 0.02 |
3135.T | MarketEnterprise Co Ltd | 0.28 | 1.18 | 0.92 |
3172.T | Tea Life Co Ltd | 0.21 | 0.36 | 0.3 |
3187.T | Sanwa Co Ltd | 0.45 | 0.56 | 0.39 |
3192.T | Shirohato Co Ltd | 1.76 | 0.43 | 0.16 |
3416.T | Pixta Inc | 0.01 | 0.52 | 0.51 |
3556.T | RenetJapanGroup Inc | 1.31 | 1.28 | 0.56 |
3674.T | Aucfan Co Ltd | 0.43 | 0.89 | 0.63 |
3726.T | 4Cs Holdings Co Ltd | 0.09 | 0.83 | 0.76 |
7695.T | Koukandekirukun Inc | 0.1 | 0.42 | 0.38 |
Low | High | |
Unlevered beta | 0.39 | 0.53 |
Relevered beta | 0.61 | 0.85 |
Adjusted relevered beta | 0.74 | 0.9 |
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 3185.T:
cost_of_equity (7.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.74) + 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.