The WACC of Fisco Ltd (3807.T) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.10% - 8.00% | 6.55% |
| Tax rate | 15.00% - 25.30% | 20.15% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 5.1% - 8.0% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.36 | 0.57 |
| Additional risk adjustments | 1.5% | 2.0% |
| Cost of equity | 5.10% | 8.00% |
| Tax rate | 15.00% | 25.30% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 5.1% | 8.0% |
| Selected WACC | 6.6% | |
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 3807.T:
cost_of_equity (6.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.36) + risk_adjustments (1.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.