3948.T WACC - Weighted Average Cost of Capital
The WACC of Hikari Business Form Co Ltd (3948.T) is 5.7%.
| Range | Selected | |
| Cost of equity | 4.8% - 6.8% | 5.8% |
| Tax rate | 31.9% - 32.1% | 32% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.8% - 6.7% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.56 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 6.8% |
| Tax rate | 31.9% | 32.1% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.8% | 6.7% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3948.T | Hikari Business Form Co Ltd | 0.03 | 0.44 | 0.44 |
| 5704.T | JMC Corp | 0.52 | 0.65 | 0.48 |
| 7831.T | Wellco Holdings Corp | 0.68 | 0.51 | 0.35 |
| 7850.T | Sougou Shouken Co Ltd | 1.17 | 0.39 | 0.22 |
| 7857.T | Seki Co Ltd | 0.04 | 0.14 | 0.14 |
| 7863.T | Hiraga Co Ltd | 0.2 | 0.36 | 0.32 |
| 7901.T | Matsumoto Inc | 0.55 | 1.02 | 0.75 |
| 7919.T | Nozaki Insatsu Shigyo Co Ltd | 0.6 | 0.57 | 0.41 |
| 7922.T | Sanko Sangyo Co Ltd | 0.18 | 0.76 | 0.67 |
| 7946.T | Koyosha Inc | 0.37 | 0.39 | 0.31 |
| Low | High | |
| Unlevered beta | 0.34 | 0.42 |
| Relevered beta | 0.34 | 0.43 |
| Adjusted relevered beta | 0.56 | 0.62 |
3948.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 3948.T:
cost_of_equity (5.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + 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.