3892.T WACC - Weighted Average Cost of Capital
The WACC of Okayama Paper Industries Co Ltd (3892.T) is 6.2%.
| Range | Selected | |
| Cost of equity | 4.9% - 7.6% | 6.25% |
| Tax rate | 30.4% - 30.6% | 30.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 7.6% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.58 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 7.6% |
| Tax rate | 30.4% | 30.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 7.6% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3892.T | Okayama Paper Industries Co Ltd | 0.01 | 0.41 | 0.41 |
| 1629.HK | Champion Alliance International Holdings Ltd | 0.4 | 0.92 | 0.72 |
| 3944.T | Furubayashi Shiko Co Ltd | 1.63 | 0.29 | 0.14 |
| 3950.T | Pack Corp | 0.01 | 0.68 | 0.68 |
| 3953.T | Ohmura Shigyo Co Ltd | 0.08 | 0.33 | 0.31 |
| 3954.T | Showa Paxxs Corp | 0.14 | 0.61 | 0.56 |
| 7504.T | Kohsoku Corp | 0.01 | 0.65 | 0.65 |
| 7923.T | Toin Corp | 1.17 | 0.51 | 0.28 |
| 9385.T | Shoei Corp | 0.92 | 0.3 | 0.18 |
| ORNA.KL | Ornapaper Bhd | 1.69 | 1.51 | 0.69 |
| Low | High | |
| Unlevered beta | 0.37 | 0.59 |
| Relevered beta | 0.37 | 0.6 |
| Adjusted relevered beta | 0.58 | 0.73 |
3892.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 3892.T:
cost_of_equity (6.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.58) + 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.