7150.T WACC - Weighted Average Cost of Capital
The WACC of Shimane Bank Ltd (7150.T) is 5.2%.
| Range | Selected | |
| Cost of equity | 7.2% - 13.4% | 10.3% |
| Tax rate | 11.1% - 19.1% | 15.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 5.6% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.95 | 1.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 13.4% |
| Tax rate | 11.1% | 19.1% |
| Debt/Equity ratio | 5.05 | 5.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 5.6% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7150.T | Shimane Bank Ltd | 5.05 | 0.72 | 0.14 |
| 8337.T | Chiba Kogyo Bank Ltd | 0.38 | 1.56 | 1.18 |
| 8349.T | Tohoku Bank Ltd | 3.23 | 0.59 | 0.16 |
| 8365.T | Bank of Toyama Ltd | 1.38 | 0.39 | 0.18 |
| 8383.T | Tottori Bank Ltd | 1.94 | 0.59 | 0.23 |
| 8521.T | Nagano Bank Ltd | 9.44 | 0.37 | 0.04 |
| 8542.T | Tomato Bank Ltd | 2.72 | 0.57 | 0.18 |
| 8551.T | Kita-Nippon Bank Ltd | 0.07 | 1.21 | 1.14 |
| 8562.T | Fukushima Bank Ltd | 0.26 | 0.97 | 0.8 |
| 8563.T | Daito Bank Ltd | 0.49 | 0.76 | 0.54 |
| Low | High | |
| Unlevered beta | 0.18 | 0.35 |
| Relevered beta | 0.93 | 1.81 |
| Adjusted relevered beta | 0.95 | 1.54 |
7150.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 7150.T:
cost_of_equity (10.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.95) + 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.