4430.T WACC - Weighted Average Cost of Capital
The WACC of Tokai Soft Co Ltd (4430.T) is 6.6%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.1% | 7.1% |
| Tax rate | 27.4% - 29.7% | 28.55% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.7% - 7.5% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.77 | 0.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.1% |
| Tax rate | 27.4% | 29.7% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.7% | 7.5% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4430.T | Tokai Soft Co Ltd | 0.14 | 0.74 | 0.67 |
| 3776.T | BroadBand Tower Inc | 0.33 | 0.82 | 0.66 |
| 3848.T | Data Applications Co Ltd | 0.02 | 0.47 | 0.46 |
| 3988.T | SYS Holdings Co Ltd | 0.21 | 0.48 | 0.41 |
| 4169.T | Enechange Ltd | 0.08 | 0.77 | 0.73 |
| 4486.T | Unite and Grow Inc | 0 | 0.54 | 0.54 |
| 4824.T | Mediaseek Inc | 0.06 | 0.47 | 0.45 |
| 7046.T | Tecnos Data Science Engineering Inc | 0 | 1.22 | 1.22 |
| 7068.T | Feedforce Inc | 0.18 | 0.71 | 0.63 |
| 7072.T | Intimate Merger Inc | 0.03 | 0.64 | 0.63 |
| Low | High | |
| Unlevered beta | 0.59 | 0.64 |
| Relevered beta | 0.66 | 0.7 |
| Adjusted relevered beta | 0.77 | 0.8 |
4430.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 4430.T:
cost_of_equity (7.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.