3766.T WACC - Weighted Average Cost of Capital
The WACC of Systems Design Co Ltd (3766.T) is 7.0%.
| Range | Selected | |
| Cost of equity | 5.1% - 8.9% | 7% |
| Tax rate | 31.4% - 33.6% | 32.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 8.9% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.61 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 8.9% |
| Tax rate | 31.4% | 33.6% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 8.9% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3766.T | Systems Design Co Ltd | 0 | 0.55 | 0.55 |
| 1724.T | Synclayer Inc | 0.83 | 0.24 | 0.16 |
| 2307.T | Cross Cat Co Ltd | 0.07 | 1.17 | 1.12 |
| 3625.T | Techfirm Holdings Inc | 0.22 | 1 | 0.87 |
| 3753.T | Flight Holdings Inc | 0.29 | 1.22 | 1.02 |
| 4386.T | SIG Co Ltd | 0.27 | 1.09 | 0.92 |
| 4437.T | Gooddays Holdings Inc | 0.11 | 0.24 | 0.22 |
| 4442.T | Valtes Co Ltd | 0.11 | 0.95 | 0.89 |
| 6193.T | Virtualex Holdings Inc | 0.3 | 0.19 | 0.16 |
| 6942.T | Sophia Holdings Co Ltd | 0.51 | 0.25 | 0.18 |
| Low | High | |
| Unlevered beta | 0.42 | 0.88 |
| Relevered beta | 0.42 | 0.88 |
| Adjusted relevered beta | 0.61 | 0.92 |
3766.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 3766.T:
cost_of_equity (7.00%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.61) + 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.