3697.T
Shift Inc
Price:  
1,714.5 
JPY
Volume:  
1,746,300
Japan | IT Services

3697.T WACC - Weighted Average Cost of Capital

The WACC of Shift Inc (3697.T) is 6.8%.

The Cost of Equity of Shift Inc (3697.T) is 6.9%.
The Cost of Debt of Shift Inc (3697.T) is 4.25%.

RangeSelected
Cost of equity5.6% - 8.2%6.9%
Tax rate34.3% - 36.8%35.55%
Cost of debt4.0% - 4.5%4.25%
WACC5.5% - 8.1%6.8%
WACC

3697.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.690.82
Additional risk adjustments0.0%0.5%
Cost of equity5.6%8.2%
Tax rate34.3%36.8%
Debt/Equity ratio
0.020.02
Cost of debt4.0%4.5%
After-tax WACC5.5%8.1%
Selected WACC6.8%

3697.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 3697.T:

cost_of_equity (6.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.