The WACC of Takaoka Toko Co Ltd (6617.T) is 8.0%.
Range | Selected | |
Cost of equity | 7.2% - 9.7% | 8.45% |
Tax rate | 24.3% - 28.2% | 26.25% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.9% - 9.1% | 8.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.95 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 9.7% |
Tax rate | 24.3% | 28.2% |
Debt/Equity ratio | 0.1 | 0.1 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.9% | 9.1% |
Selected WACC | 8.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6617.T | Takaoka Toko Co Ltd | 0.1 | 0.91 | 0.85 |
5310.T | Toyo Tanso Co Ltd | 0.01 | 1.19 | 1.19 |
5805.T | SWCC Showa Holdings Co Ltd | 0.22 | 1.47 | 1.26 |
5807.T | Totoku Electric Co Ltd | 0.06 | 1.14 | 1.09 |
5809.T | Tatsuta Electric Wire and Cable Co Ltd | 0.02 | -0.11 | -0.11 |
6516.T | Sanyo Denki Co Ltd | 0.06 | 0.92 | 0.88 |
6517.T | Denyo Co Ltd | 0.07 | 0.92 | 0.87 |
6637.T | Terasaki Electric Co Ltd | 0.07 | 1.61 | 1.53 |
6924.T | Iwasaki Electric Co Ltd | 0.12 | 0.3 | 0.28 |
6955.T | FDK Corp | 1.23 | 0.79 | 0.42 |
Low | High | |
Unlevered beta | 0.87 | 0.96 |
Relevered beta | 0.93 | 1.03 |
Adjusted relevered beta | 0.95 | 1.02 |
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 6617.T:
cost_of_equity (8.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.95) + 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.