The WACC of M-up Holdings Inc (3661.T) is 6.7%.
| Range | Selected | |
| Cost of equity | 8.20% - 12.30% | 10.25% |
| Tax rate | 37.30% - 40.80% | 39.05% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 5.7% - 7.6% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.11 | 1.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.20% | 12.30% |
| Tax rate | 37.30% | 40.80% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 5.7% | 7.6% |
| Selected WACC | 6.7% | |
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 3661.T:
cost_of_equity (10.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.