The WACC of Alinco Inc (5933.T) is 4.8%.
Range | Selected | |
Cost of equity | 6.5% - 8.6% | 7.55% |
Tax rate | 38.8% - 42.1% | 40.45% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.3% - 5.3% | 4.8% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.84 | 0.87 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 8.6% |
Tax rate | 38.8% | 42.1% |
Debt/Equity ratio | 1.23 | 1.23 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.3% | 5.3% |
Selected WACC | 4.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
5933.T | Alinco Inc | 1.23 | 0.76 | 0.44 |
4242.T | Takagi Seiko Corp | 1.79 | 0.32 | 0.15 |
5982.T | Maruzen Co Ltd | 0 | 0.45 | 0.45 |
6293.T | Nissei Plastic Industrial Co Ltd | 1.45 | 0.82 | 0.44 |
6317.T | Kitagawa Corp | 1.29 | 0.89 | 0.5 |
6363.T | Torishima Pump Mfg Co Ltd | 0.28 | 1.3 | 1.12 |
6440.T | Juki Corp | 7.67 | 1.1 | 0.2 |
6464.T | Tsubaki Nakashima Co Ltd | 5.82 | 1.3 | 0.3 |
7721.T | Tokyo Keiki Inc | 0.27 | 1.96 | 1.69 |
7888.T | Sanko Gosei Ltd | 1.22 | 1.46 | 0.85 |
Low | High | |
Unlevered beta | 0.44 | 0.47 |
Relevered beta | 0.76 | 0.81 |
Adjusted relevered beta | 0.84 | 0.87 |
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 5933.T:
cost_of_equity (7.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.