6038.T WACC - Weighted Average Cost of Capital
The WACC of IID Inc (6038.T) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.7% | 7.25% |
| Tax rate | 35.5% - 44.3% | 39.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.3% - 7.8% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.71 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.7% |
| Tax rate | 35.5% | 44.3% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.3% | 7.8% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6038.T | IID Inc | 0.18 | 0.22 | 0.2 |
| 2436.T | Kyodo Public Relations Co Ltd | 0.07 | 0.79 | 0.76 |
| 2449.T | PRAP Japan Inc | 0.01 | 0.28 | 0.28 |
| 3695.T | GMO Research Inc | 0 | 0.6 | 0.6 |
| 3929.T | Socialwire Co Ltd | 0.06 | 0.97 | 0.93 |
| 4760.T | Alpha Co Ltd | 1.19 | 0.66 | 0.39 |
| 6081.T | Allied Architects Inc | 0.2 | 1.51 | 1.35 |
| 6543.T | Nissen Inc | 0.11 | 0.27 | 0.25 |
| 7042.T | Access Group Holdings Co Ltd | 0.48 | 1.08 | 0.84 |
| 7067.T | Branding Technology Inc | 0.14 | 0.81 | 0.75 |
| Low | High | |
| Unlevered beta | 0.51 | 0.75 |
| Relevered beta | 0.57 | 0.84 |
| Adjusted relevered beta | 0.71 | 0.89 |
6038.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 6038.T:
cost_of_equity (7.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.71) + 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.