The WACC of Japan Asia Group Ltd (3751.T) is 9.6%.
| Range | Selected | |
| Cost of equity | 20.10% - 26.50% | 23.30% |
| Tax rate | 30.60% - 30.70% | 30.65% |
| Cost of debt | 4.00% - 13.80% | 8.90% |
| WACC | 6.3% - 13.0% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 0.8% | 1.2% |
| Equity market risk premium | 5.4% | 6.4% |
| Adjusted beta | 3.56 | 3.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 20.10% | 26.50% |
| Tax rate | 30.60% | 30.70% |
| Debt/Equity ratio | 3.95 | 3.95 |
| Cost of debt | 4.00% | 13.80% |
| After-tax WACC | 6.3% | 13.0% |
| Selected WACC | 9.6% | |
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 3751.T:
cost_of_equity (23.30%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (3.56) + 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.