The WACC of Takamisawa Cybernetics Co Ltd (6424.T) is 7.0%.
Range | Selected | |
Cost of equity | 9.2% - 13.0% | 11.1% |
Tax rate | 27.4% - 27.8% | 27.6% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.9% - 8.0% | 7.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.28 | 1.49 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.2% | 13.0% |
Tax rate | 27.4% | 27.8% |
Debt/Equity ratio | 1.07 | 1.07 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.9% | 8.0% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6424.T | Takamisawa Cybernetics Co Ltd | 1.07 | 0.86 | 0.49 |
6418.T | Japan Cash Machine Co Ltd | 0.39 | 1.21 | 0.94 |
6639.T | Contec Co Ltd | 0.17 | 1.67 | 1.48 |
6709.T | Meisei Electric Co Ltd | 0.01 | 1.02 | 1.02 |
6777.T | Santec Corp | 0.04 | 1.63 | 1.59 |
6848.T | DKK-Toa Corp | 0.07 | 0.53 | 0.51 |
6853.T | Kyowa Electronic Instruments Co Ltd | 0.06 | 0.6 | 0.57 |
6862.T | Minato Holdings Inc | 1.52 | 0.51 | 0.24 |
6946.T | Nippon Avionics Co Ltd | 0.07 | 1.91 | 1.82 |
7727.T | Oval Corp | 0.14 | 1.04 | 0.95 |
Low | High | |
Unlevered beta | 0.8 | 0.97 |
Relevered beta | 1.42 | 1.73 |
Adjusted relevered beta | 1.28 | 1.49 |
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 6424.T:
cost_of_equity (11.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.28) + 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.