The WACC of Mugen Estate Co Ltd (3299.T) is 4.9%.
Range | Selected | |
Cost of equity | 5.7% - 8.4% | 7.05% |
Tax rate | 30.8% - 31.3% | 31.05% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.2% - 5.7% | 4.9% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.71 | 0.84 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 8.4% |
Tax rate | 30.8% | 31.3% |
Debt/Equity ratio | 1.05 | 1.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.2% | 5.7% |
Selected WACC | 4.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3299.T | Mugen Estate Co Ltd | 1.05 | 1.19 | 0.69 |
2975.T | Star Mica Holdings Co Ltd | 2.24 | 0.76 | 0.3 |
3236.T | Properst Co Ltd | 2.74 | 0.71 | 0.25 |
3245.T | Dear Life Co Ltd | 0.34 | 0.83 | 0.67 |
3277.T | Sansei Landic Co Ltd | 1.93 | 0.46 | 0.2 |
3458.T | Cre Inc | 1.56 | 0.71 | 0.34 |
3480.T | JSB Co Ltd | 0.31 | 0.63 | 0.52 |
3486.T | Global Link Management Inc | 0.65 | 1.08 | 0.74 |
3497.T | LeTech Corp | 1.02 | 0.67 | 0.39 |
9633.T | Tokyo Theatres Co Inc | 0.71 | 0.12 | 0.08 |
Low | High | |
Unlevered beta | 0.32 | 0.44 |
Relevered beta | 0.57 | 0.76 |
Adjusted relevered beta | 0.71 | 0.84 |
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 3299.T:
cost_of_equity (7.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.71) + 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.