The WACC of Tamagawa Holdings Co Ltd (6838.T) is 6.1%.
Range | Selected | |
Cost of equity | 6.0% - 9.8% | 7.9% |
Tax rate | 20.7% - 33.8% | 27.25% |
Cost of debt | 4.0% - 6.6% | 5.3% |
WACC | 4.7% - 7.4% | 6.1% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.75 | 1.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 9.8% |
Tax rate | 20.7% | 33.8% |
Debt/Equity ratio | 0.79 | 0.79 |
Cost of debt | 4.0% | 6.6% |
After-tax WACC | 4.7% | 7.4% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6838.T | Tamagawa Holdings Co Ltd | 0.79 | 1.25 | 0.81 |
6659.T | Media Links Co Ltd | 0.33 | 1.06 | 0.86 |
6696.T | P3 Inc | 0.02 | 1.3 | 1.28 |
6704.T | Iwatsu Electric Co Ltd | 0.27 | -0.01 | -0.01 |
6715.T | Nakayo Inc | 0.95 | -0.22 | -0.14 |
6778.T | Artiza Networks Inc | 0.26 | 0.39 | 0.33 |
6815.T | Uniden Holdings Corp | 0.22 | 1.04 | 0.91 |
6822.T | Oi Electric Co Ltd | 1.41 | 0.73 | 0.37 |
6835.T | Allied Telesis Holdings KK | 0.45 | 0.59 | 0.45 |
6930.T | Nippon Antenna Co Ltd | 0.03 | 0.61 | 0.6 |
Low | High | |
Unlevered beta | 0.42 | 0.68 |
Relevered beta | 0.63 | 1.04 |
Adjusted relevered beta | 0.75 | 1.03 |
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 6838.T:
cost_of_equity (7.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.75) + 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.