3187.T WACC - Weighted Average Cost of Capital
The WACC of Sanwa Co Ltd (3187.T) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.3% - 8.0% | 6.65% |
| Tax rate | 28.6% - 36.9% | 32.75% |
| Cost of debt | 4.0% - 5.0% | 4.5% |
| WACC | 4.6% - 6.6% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.63 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 8.0% |
| Tax rate | 28.6% | 36.9% |
| Debt/Equity ratio | 0.42 | 0.42 |
| Cost of debt | 4.0% | 5.0% |
| After-tax WACC | 4.6% | 6.6% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3187.T | Sanwa Co Ltd | 0.42 | 0.55 | 0.43 |
| 3059.T | Hiraki Co Ltd | 1.49 | 0.03 | 0.01 |
| 3135.T | MarketEnterprise Co Ltd | 0.26 | 1.15 | 0.98 |
| 3172.T | Tea Life Co Ltd | 0.21 | 0.36 | 0.32 |
| 3185.T | Dream Vision Co Ltd | 0.61 | 0.04 | 0.03 |
| 3192.T | Shirohato Co Ltd | 1.67 | 0.43 | 0.2 |
| 3556.T | RenetJapanGroup Inc | 1.08 | 1.31 | 0.77 |
| 3558.T | Locondo Inc | 0.05 | 0.98 | 0.95 |
| 3674.T | Aucfan Co Ltd | 0.42 | 0.9 | 0.7 |
| 7695.T | Koukandekirukun Inc | 0.11 | 0.41 | 0.38 |
| Low | High | |
| Unlevered beta | 0.36 | 0.54 |
| Relevered beta | 0.45 | 0.69 |
| Adjusted relevered beta | 0.63 | 0.79 |
3187.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 3187.T:
cost_of_equity (6.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.63) + 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.