The WACC of DaikyoNishikawa Corp (4246.T) is 7.0%.
Range | Selected | |
Cost of equity | 7.9% - 10.5% | 9.2% |
Tax rate | 27.7% - 30.6% | 29.15% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.1% - 7.9% | 7.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.06 | 1.14 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.9% | 10.5% |
Tax rate | 27.7% | 30.6% |
Debt/Equity ratio | 0.55 | 0.55 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.1% | 7.9% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
4246.T | DaikyoNishikawa Corp | 0.55 | 0.63 | 0.46 |
5975.T | Topre Corp | 0.47 | 1.21 | 0.91 |
5989.T | H-One Co Ltd | 1.8 | 1.25 | 0.56 |
6463.T | TPR Co Ltd | 0.49 | 1.07 | 0.8 |
7220.T | Musashi Seimitsu Industry Co Ltd | 0.46 | 1.46 | 1.11 |
7238.T | Akebono Brake Industry Co Ltd | 1.19 | 1.41 | 0.77 |
7244.T | Ichikoh Industries Ltd | 0.12 | 1.17 | 1.08 |
7279.T | Hi-Lex Corp | 0.16 | 0.94 | 0.84 |
7287.T | Nippon Seiki Co Ltd | 0.38 | 1.19 | 0.94 |
7315.T | IJTT Co Ltd | 0.23 | 0.6 | 0.52 |
Low | High | |
Unlevered beta | 0.79 | 0.87 |
Relevered beta | 1.09 | 1.21 |
Adjusted relevered beta | 1.06 | 1.14 |
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 4246.T:
cost_of_equity (9.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.