7038.T WACC - Weighted Average Cost of Capital
The WACC of Frontier Management Inc (7038.T) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.5% - 9.0% | 7.75% |
| Tax rate | 31.3% - 34.4% | 32.85% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.3% - 8.4% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.84 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 9.0% |
| Tax rate | 31.3% | 34.4% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.3% | 8.4% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7038.T | Frontier Management Inc | 0.16 | 1.03 | 0.93 |
| 6087.T | Abist Co Ltd | 0 | 0.27 | 0.27 |
| 6171.T | CE Management Integrated Laboratory Co Ltd | 0.13 | 0.46 | 0.42 |
| 6542.T | Founder's Consultants Holdings Inc | 0.02 | 0.37 | 0.37 |
| 6560.T | LTS Inc | 0.4 | 0.86 | 0.68 |
| 7033.T | Management Solutions Co Ltd | 0.01 | 1.3 | 1.28 |
| 7034.T | Prored Partners Co Ltd | 0.21 | 1.13 | 0.99 |
| 7039.T | Bridge International Corp | 0.07 | 0.72 | 0.69 |
| 7066.T | Peers Co Ltd | 0.18 | 0.8 | 0.72 |
| 9644.T | Tanabe Consulting Co Ltd | 0.01 | 1.25 | 1.24 |
| Low | High | |
| Unlevered beta | 0.69 | 0.8 |
| Relevered beta | 0.76 | 0.9 |
| Adjusted relevered beta | 0.84 | 0.93 |
7038.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 7038.T:
cost_of_equity (7.75%) = 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.