7822.T WACC - Weighted Average Cost of Capital
The WACC of Eidai Co Ltd (7822.T) is 5.8%.
| Range | Selected | |
| Cost of equity | 6.2% - 10.3% | 8.25% |
| Tax rate | 12.1% - 13.6% | 12.85% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.3% - 7.3% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.78 | 1.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 10.3% |
| Tax rate | 12.1% | 13.6% |
| Debt/Equity ratio | 2.43 | 2.43 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.3% | 7.3% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7822.T | Eidai Co Ltd | 2.43 | 0.5 | 0.16 |
| 5391.T | A&A Material Corp | 0.53 | 0.83 | 0.57 |
| 5935.T | Gantan Beauty Industry Co Ltd | 0.21 | 0.27 | 0.23 |
| 5959.T | Okabe Co Ltd | 0.16 | 0.61 | 0.53 |
| 5973.T | Toami Corp | 1.31 | 0.31 | 0.14 |
| 6484.T | KVK Corp | 0.01 | 0.2 | 0.2 |
| 7438.T | Kondotec Inc | 0.13 | 0.67 | 0.6 |
| 7871.T | Fukuvi Chemical Industry Co Ltd | 0.07 | 0.59 | 0.55 |
| 7879.T | Noda Corp | 0.87 | 0.47 | 0.26 |
| 7896.T | Seven Industries Co Ltd | 0.62 | 0.27 | 0.17 |
| Low | High | |
| Unlevered beta | 0.22 | 0.37 |
| Relevered beta | 0.67 | 1.16 |
| Adjusted relevered beta | 0.78 | 1.11 |
7822.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 7822.T:
cost_of_equity (8.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.78) + 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.