The WACC of AJIS Co Ltd (4659.T) is 7.0%.
Range | Selected | |
Cost of equity | 5.7% - 8.3% | 7% |
Tax rate | 32.2% - 32.7% | 32.45% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.7% - 8.2% | 7.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.7 | 0.82 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 8.3% |
Tax rate | 32.2% | 32.7% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.7% | 8.2% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
4659.T | AJIS Co Ltd | 0.01 | 0.28 | 0.28 |
2151.T | Takeei Corp | 0.85 | 1.21 | 0.77 |
3461.T | Palma Co Ltd | 0.2 | 1.04 | 0.92 |
4290.T | Prestige International Inc | 0 | 0.56 | 0.56 |
4653.T | Daiohs Corp | 0.31 | 0.66 | 0.55 |
5690.T | Rever Holdings Corp | 0.23 | 1 | 0.87 |
5698.T | Envipro Holdings Inc | 0.6 | 1 | 0.71 |
6093.T | Escrow Agent Japan Inc | 0.03 | 0.77 | 0.76 |
7087.T | Willtec Co Ltd | 0.2 | 0.54 | 0.47 |
9780.T | Harima B.Stem Corp | 0.1 | 0.5 | 0.47 |
Low | High | |
Unlevered beta | 0.55 | 0.73 |
Relevered beta | 0.55 | 0.73 |
Adjusted relevered beta | 0.7 | 0.82 |
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 4659.T:
cost_of_equity (7.00%) = 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.