3970.T WACC - Weighted Average Cost of Capital
The WACC of Innovation Inc (3970.T) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.7% - 11.6% | 8.65% |
| Tax rate | 27.7% - 30.6% | 29.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.3% - 7.5% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.7 | 1.3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 11.6% |
| Tax rate | 27.7% | 30.6% |
| Debt/Equity ratio | 0.95 | 0.95 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.3% | 7.5% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3970.T | Innovation Inc | 0.95 | 0.44 | 0.27 |
| 2334.T | Eole Inc | 0.02 | -0.37 | -0.36 |
| 3690.T | YRGLM Inc | 0.25 | 0.45 | 0.38 |
| 3906.T | Albert Inc | 0 | 1.19 | 1.19 |
| 6046.T | Linkbal Inc | 0.05 | 1.04 | 1.01 |
| 6048.T | DesignOne Japan Inc | 0.05 | 1.34 | 1.3 |
| 6550.T | Fringe81 Co Ltd | 0.25 | 0.23 | 0.19 |
| 6573.T | Agile Media Network Inc | 0.03 | 0.8 | 0.78 |
| 7069.T | CyberBuzz Inc | 0.39 | 0.3 | 0.24 |
| STG.AX | Straker Translations Ltd | 0.03 | 1.9 | 1.87 |
| Low | High | |
| Unlevered beta | 0.34 | 0.87 |
| Relevered beta | 0.55 | 1.45 |
| Adjusted relevered beta | 0.7 | 1.3 |
3970.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 3970.T:
cost_of_equity (8.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.