The WACC of Star Asia Investment Corp (3468.T) is 4.9%.
Range | Selected | |
Cost of equity | 4.4% - 6.3% | 5.35% |
Tax rate | 0.0% - 0.0% | 0% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.2% - 5.5% | 4.9% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.5 | 0.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.4% | 6.3% |
Tax rate | 0.0% | 0.0% |
Debt/Equity ratio | 0.79 | 0.79 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.2% | 5.5% |
Selected WACC | 4.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3468.T | Star Asia Investment Corp | 0.79 | 0.32 | 0.18 |
2971.T | Escon Japan Reit Investment Corp | 0.75 | 0.37 | 0.21 |
3295.T | Hulic Reit Inc | 0.82 | 0.19 | 0.1 |
3459.T | Samty Residential Investment Corp | 1.12 | 0.32 | 0.15 |
3488.T | Xymax Reit Investment Corp | 0.7 | 0.33 | 0.19 |
3492.T | Takara Leben Real Estate Investment Corp | 0.93 | 0.39 | 0.2 |
8966.T | Heiwa Real Estate REIT Inc | 0.7 | 0.35 | 0.2 |
8979.T | Starts Proceed Investment Corp | 1.11 | 0.12 | 0.06 |
8984.T | Daiwa House REIT Investment Corp | 0.75 | 0.2 | 0.12 |
AXREIT.KL | Axis Real Estate Investment Trust | 0.44 | 0.17 | 0.12 |
Low | High | |
Unlevered beta | 0.14 | 0.19 |
Relevered beta | 0.25 | 0.33 |
Adjusted relevered beta | 0.5 | 0.55 |
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 3468.T:
cost_of_equity (5.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.5) + 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.