The WACC of Sigma Koki Co Ltd (7713.T) is 6.3%.
Range | Selected | |
Cost of equity | 5.3% - 7.6% | 6.45% |
Tax rate | 28.4% - 29.1% | 28.75% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.2% - 7.4% | 6.3% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.64 | 0.73 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 7.6% |
Tax rate | 28.4% | 29.1% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.2% | 7.4% |
Selected WACC | 6.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
7713.T | Sigma Koki Co Ltd | 0.05 | 0.62 | 0.6 |
6384.T | Showa Shinku Co Ltd | 0.07 | 0.45 | 0.43 |
6428.T | Oizumi Corp | 2.19 | 0.69 | 0.27 |
6664.T | OptoElectronics Co Ltd | 3.72 | 0.88 | 0.24 |
6668.T | Adtec Plasma Technology Co Ltd | 1.17 | 1.04 | 0.57 |
6709.T | Meisei Electric Co Ltd | 0.01 | 1.02 | 1.02 |
6858.T | Ono Sokki Co Ltd | 0.21 | 1.03 | 0.9 |
6870.T | Fenwal Controls of Japan Ltd | 0.13 | 0.04 | 0.04 |
7719.T | Tokyo Koki Co Ltd | 0.5 | 0.63 | 0.46 |
7727.T | Oval Corp | 0.14 | 1.03 | 0.94 |
Low | High | |
Unlevered beta | 0.45 | 0.58 |
Relevered beta | 0.46 | 0.6 |
Adjusted relevered beta | 0.64 | 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 7713.T:
cost_of_equity (6.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.64) + 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.