6822.T WACC - Weighted Average Cost of Capital
The WACC of Oi Electric Co Ltd (6822.T) is 7.1%.
| Range | Selected | |
| Cost of equity | 8.7% - 16.9% | 12.8% |
| Tax rate | 12.5% - 14.0% | 13.25% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.5% - 8.7% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.2 | 2.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 16.9% |
| Tax rate | 12.5% | 14.0% |
| Debt/Equity ratio | 1.68 | 1.68 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.5% | 8.7% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6822.T | Oi Electric Co Ltd | 1.41 | 0.73 | 0.33 |
| 3062.TW | CyberTAN Technology Inc | 0.07 | 1.51 | 1.42 |
| 6696.T | P3 Inc | 0.02 | 1.3 | 1.27 |
| 6704.T | Iwatsu Electric Co Ltd | 0.27 | -0.01 | -0.01 |
| 6715.T | Nakayo Inc | 0.95 | -0.22 | -0.12 |
| 6815.T | Uniden Holdings Corp | 0.22 | 1.04 | 0.88 |
| 6835.T | Allied Telesis Holdings KK | 0.45 | 0.59 | 0.42 |
| 6930.T | Nippon Antenna Co Ltd | 0.03 | 0.61 | 0.59 |
| GPACKET.KL | Green Packet Bhd | 0.05 | 2.08 | 1.99 |
| VINDHYATEL.NS | Vindhya Telelinks Ltd | 0.26 | 1.68 | 1.37 |
| Low | High | |
| Unlevered beta | 0.52 | 1.03 |
| Relevered beta | 1.3 | 2.55 |
| Adjusted relevered beta | 1.2 | 2.04 |
6822.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 6822.T:
cost_of_equity (12.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.2) + 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.