3880.T WACC - Weighted Average Cost of Capital
The WACC of Daio Paper Corp (3880.T) is 4.2%.
| Range | Selected | |
| Cost of equity | 4.4% - 9.0% | 6.7% |
| Tax rate | 35.0% - 36.6% | 35.8% |
| Cost of debt | 4.0% - 6.6% | 5.3% |
| WACC | 3.0% - 5.3% | 4.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.5 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.4% | 9.0% |
| Tax rate | 35.0% | 36.6% |
| Debt/Equity ratio | 3.3 | 3.3 |
| Cost of debt | 4.0% | 6.6% |
| After-tax WACC | 3.0% | 5.3% |
| Selected WACC | 4.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3880.T | Daio Paper Corp | 3.3 | 0.68 | 0.22 |
| 002030.KS | Asia Holdings Co Ltd | 1.19 | 0.07 | 0.04 |
| 009200.KS | Moorim Paper Co Ltd | 15.82 | 0.28 | 0.02 |
| 3708.T | Tokushu Tokai Paper Co Ltd | 0.58 | 0.53 | 0.38 |
| 3863.T | Nippon Paper Industries Co Ltd | 7.29 | 0.6 | 0.11 |
| 3864.T | Mitsubishi Paper Mills Ltd | 2.52 | 1.23 | 0.47 |
| 3865.T | Hokuetsu Corp | 0.47 | 0.77 | 0.59 |
| 3877.T | Chuetsu Pulp & Paper Co Ltd | 1.71 | 0.81 | 0.38 |
| 7800.T | Amifa Co Ltd | 0.04 | 0.02 | 0.02 |
| 7905.T | Daiken Corp | 0.38 | -0.32 | -0.26 |
| Low | High | |
| Unlevered beta | 0.08 | 0.28 |
| Relevered beta | 0.25 | 0.9 |
| Adjusted relevered beta | 0.5 | 0.93 |
3880.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 3880.T:
cost_of_equity (6.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.5) + 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.