3793.T WACC - Weighted Average Cost of Capital
The WACC of Drecom Co Ltd (3793.T) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 8.5% | 6.9% |
| Tax rate | 26.1% - 32.6% | 29.35% |
| Cost of debt | 4.0% - 6.6% | 5.3% |
| WACC | 4.8% - 7.5% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.64 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 8.5% |
| Tax rate | 26.1% | 32.6% |
| Debt/Equity ratio | 0.3 | 0.3 |
| Cost of debt | 4.0% | 6.6% |
| After-tax WACC | 4.8% | 7.5% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3793.T | Drecom Co Ltd | 0.3 | 1.04 | 0.86 |
| 3667.T | Enish Inc | 0.09 | 0.27 | 0.26 |
| 3810.T | Cyberstep Inc | 0.03 | 1.46 | 1.43 |
| 3815.T | Media Kobo Inc | 0.2 | 0.33 | 0.29 |
| 3851.T | Nippon Ichi Software Inc | 0.39 | 0.46 | 0.37 |
| 3907.T | Silicon Studio Corp | 0.11 | 0.42 | 0.39 |
| 3911.T | Aiming Inc | 0 | 0.79 | 0.79 |
| 3928.T | Mynet Inc | 1.08 | 1.2 | 0.69 |
| 4644.T | Imagineer Co Ltd | 1 | 0.26 | 0.15 |
| 7060.T | Geechs Inc | 0.42 | 0.79 | 0.61 |
| Low | High | |
| Unlevered beta | 0.38 | 0.64 |
| Relevered beta | 0.46 | 0.78 |
| Adjusted relevered beta | 0.64 | 0.85 |
3793.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 3793.T:
cost_of_equity (6.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.64) + 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.