3205.T
Daidoh Ltd
Price:  
827.00 
JPY
Volume:  
151,500.00
Japan | Textiles, Apparel & Luxury Goods
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3205.T WACC - Weighted Average Cost of Capital

The WACC of Daidoh Ltd (3205.T) is 6.5%.

The Cost of Equity of Daidoh Ltd (3205.T) is 5.80%.
The Cost of Debt of Daidoh Ltd (3205.T) is 12.70%.

Range Selected
Cost of equity 4.80% - 6.80% 5.80%
Tax rate 32.20% - 41.40% 36.80%
Cost of debt 4.00% - 21.40% 12.70%
WACC 4.1% - 8.9% 6.5%
WACC

3205.T WACC calculation

Category Low High
Long-term bond rate 1.4% 1.9%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.56 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 4.80% 6.80%
Tax rate 32.20% 41.40%
Debt/Equity ratio 0.57 0.57
Cost of debt 4.00% 21.40%
After-tax WACC 4.1% 8.9%
Selected WACC 6.5%

3205.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 3205.T:

cost_of_equity (5.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + 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.