The WACC of Japan Resistor Mfg. Co Ltd (6977.T) is 4.6%.
Range | Selected | |
Cost of equity | 6.5% - 12.0% | 9.25% |
Tax rate | 37.5% - 40.4% | 38.95% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 3.4% - 5.9% | 4.6% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.84 | 1.34 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 12.0% |
Tax rate | 37.5% | 40.4% |
Debt/Equity ratio | 3.5 | 3.5 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 3.4% | 5.9% |
Selected WACC | 4.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6977.T | Japan Resistor Mfg. Co Ltd | 3.5 | 0.36 | 0.11 |
6666.T | River Eletec Corp | 1.23 | 0.95 | 0.55 |
6772.T | Tokyo Cosmos Electric Co Ltd | 0.24 | 0.17 | 0.15 |
6837.T | Kyosha Co Ltd | 1.72 | 1.01 | 0.5 |
6907.T | Geomatec Co Ltd | 0.29 | 1.29 | 1.1 |
6926.T | Okaya Electric Industries Co Ltd | 1.05 | 0.41 | 0.25 |
6938.T | Soshin Electric Co Ltd | 0.07 | -0.4 | -0.38 |
6964.T | Sanko Co Ltd | 0 | 0.23 | 0.23 |
6969.T | Matsuo Electric Co Ltd | 1.59 | 0.94 | 0.48 |
7746.T | Okamoto Glass Co Ltd | 1.44 | 1.2 | 0.64 |
Low | High | |
Unlevered beta | 0.24 | 0.48 |
Relevered beta | 0.76 | 1.51 |
Adjusted relevered beta | 0.84 | 1.34 |
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 6977.T:
cost_of_equity (9.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.