7748.T WACC - Weighted Average Cost of Capital

The WACC of Holon Co Ltd (7748.T) is 8.2%.

The Cost of Equity of Holon Co Ltd (7748.T) is 8.25%.

The Cost of Debt of Holon Co Ltd (7748.T) is 4.25%.

	Range	Selected
Cost of equity	7.00% - 9.50%	8.25%
Tax rate	27.10% - 30.20%	28.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.0% - 9.4%	8.2%

WACC

7748.T WACC calculation

Category	Low	High

Long-term bond rate	0.8%	1.2%
Equity market risk premium	5.4%	6.4%
Adjusted beta	1.16	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	9.50%

Tax rate	27.10%	30.20%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	4.50%

After-tax WACC	7.0%	9.4%


Selected WACC	8.2%

7748.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 7748.T:

cost_of_equity (8.25%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (1.16) + 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.