4674.T WACC - Weighted Average Cost of Capital
The WACC of Cresco Ltd (4674.T) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.0% | 7.85% |
| Tax rate | 33.3% - 33.9% | 33.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.6% - 8.9% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.87 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.0% |
| Tax rate | 33.3% | 33.9% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.6% | 8.9% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4674.T | Cresco Ltd | 0.03 | 0.91 | 0.89 |
| 2497.T | United Inc | 0.01 | 0.57 | 0.57 |
| 3677.T | System Information Co Ltd | 0.02 | 0.04 | 0.04 |
| 3771.T | System Research Co Ltd | 0.04 | 1.13 | 1.1 |
| 4323.T | Japan System Techniques Co Ltd | 0 | 0.73 | 0.73 |
| 4662.T | Focus Systems Corp | 0.08 | 0.89 | 0.85 |
| 4699.T | Uchida Esco Co Ltd | 0.03 | 1.17 | 1.15 |
| 4826.T | Computer Institute of Japan Ltd | 0.02 | 0.96 | 0.95 |
| 4847.T | Intelligent Wave Inc | 0 | 0.87 | 0.87 |
| 9709.T | NCS&A Co Ltd | 0 | 0.54 | 0.54 |
| Low | High | |
| Unlevered beta | 0.8 | 0.88 |
| Relevered beta | 0.81 | 0.9 |
| Adjusted relevered beta | 0.87 | 0.93 |
4674.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 4674.T:
cost_of_equity (7.85%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.87) + 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.