3682.T WACC - Weighted Average Cost of Capital
The WACC of Encourage Technologies Co Ltd (3682.T) is 7.2%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.3% | 10.9% |
| Tax rate | 28.3% - 30.2% | 29.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.5% - 7.9% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.32 | 1.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.3% |
| Tax rate | 28.3% | 30.2% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.5% | 7.9% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3682.T | Encourage Technologies Co Ltd | 0.99 | 0.52 | 0.31 |
| 2345.T | Kushim Inc | 0.34 | 1.27 | 1.03 |
| 3040.T | Soliton Systems KK | 0.01 | 0.92 | 0.91 |
| 3744.T | SIOS Technology Inc | 0.03 | 0.96 | 0.94 |
| 3804.T | System D Inc | 0.03 | 0.1 | 0.1 |
| 3853.T | Asteria Corp | 0.01 | 0.94 | 0.94 |
| 3920.T | Internetworking and Broadband Consulting Co Ltd | 0.15 | 0.86 | 0.78 |
| 3927.T | Fuva Brain Ltd | 0.08 | 1.31 | 1.24 |
| 3935.T | Edia Co Ltd | 0.23 | 1.06 | 0.91 |
| 3997.T | Trade Works Co Ltd | 0.19 | 0.91 | 0.81 |
| 4013.T | Nittsusystem Co Ltd | 0.12 | 0.45 | 0.42 |
| Low | High | |
| Unlevered beta | 0.81 | 0.91 |
| Relevered beta | 1.48 | 1.58 |
| Adjusted relevered beta | 1.32 | 1.39 |
3682.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 3682.T:
cost_of_equity (10.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.32) + 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.