4650.T WACC - Weighted Average Cost of Capital
The WACC of SD Entertainment Inc (4650.T) is 5.3%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.5% | 7.05% |
| Tax rate | 27.7% - 30.6% | 29.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.4% - 6.2% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.69 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.5% |
| Tax rate | 27.7% | 30.6% |
| Debt/Equity ratio | 0.75 | 0.75 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.4% | 6.2% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4650.T | SD Entertainment Inc | 0.75 | 0.27 | 0.18 |
| 2404.T | Tetsujin Inc | 0.37 | 0.23 | 0.18 |
| 5261.T | Resol Holdings Co Ltd | 0.54 | 0.46 | 0.33 |
| 6040.T | Nippon Ski Resort Development Co Ltd | 0.11 | 0.68 | 0.63 |
| 6570.T | Kyowa Corp | 0.99 | 0.61 | 0.36 |
| 6819.T | Izu Shaboten Resort Co Ltd | 0.04 | 0.65 | 0.63 |
| 7085.T | Curves Holdings Co Ltd | 0.13 | 0.56 | 0.51 |
| 7092.T | Fast Fitness Japan Inc | 0.08 | 0.62 | 0.59 |
| 8920.T | Tosho Co Ltd | 1.09 | 0.87 | 0.5 |
| 9656.T | Greenland Resort Co Ltd | 0.86 | 0.14 | 0.09 |
| Low | High | |
| Unlevered beta | 0.35 | 0.5 |
| Relevered beta | 0.54 | 0.78 |
| Adjusted relevered beta | 0.69 | 0.85 |
4650.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 4650.T:
cost_of_equity (7.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.