The WACC of Jaic Co Ltd (7073.T) is 5.0%.
Range | Selected | |
Cost of equity | 5.0% - 7.6% | 6.3% |
Tax rate | 36.4% - 39.2% | 37.8% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.1% - 5.8% | 5.0% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.59 | 0.73 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 7.6% |
Tax rate | 36.4% | 39.2% |
Debt/Equity ratio | 0.56 | 0.56 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.1% | 5.8% |
Selected WACC | 5.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
7073.T | Jaic Co Ltd | 0.56 | 0.45 | 0.34 |
2464.T | Business Breakthrough Inc | 0.03 | 0.14 | 0.14 |
4319.T | TAC Co Ltd | 1.37 | 1.1 | 0.6 |
4705.T | Clip Corp | 0.05 | 0.22 | 0.22 |
4718.T | Waseda Academy Co Ltd | 0.01 | 0.6 | 0.59 |
4720.T | Johnan Academic Preparatory Institute Inc | 0.33 | 0.2 | 0.17 |
9760.T | Shingakukai Holdings Co Ltd | 2.08 | 0.64 | 0.28 |
9778.T | Subaru Co Ltd | 0.33 | 0.33 | 0.27 |
SIT.AX | Site Group International Ltd | 0.41 | 1.14 | 0.91 |
UCW.AX | UCW Ltd | 0.73 | 1.04 | 0.72 |
Low | High | |
Unlevered beta | 0.28 | 0.44 |
Relevered beta | 0.39 | 0.6 |
Adjusted relevered beta | 0.59 | 0.73 |
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 7073.T:
cost_of_equity (6.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.