The WACC of People Co Ltd (7865.T) is 6.5%.
Range | Selected | |
Cost of equity | 7.8% - 11.1% | 9.45% |
Tax rate | 30.7% - 30.7% | 30.7% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.6% - 7.3% | 6.5% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.05 | 1.22 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.8% | 11.1% |
Tax rate | 30.7% | 30.7% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.6% | 7.3% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
7865.T | People Co Ltd | 0.87 | 0.4 | 0.25 |
2767.T | Fields Corp | 0.09 | 1.2 | 1.13 |
4274.T | Hosoya Pyro-Engineering Co Ltd | 0.16 | 1 | 0.9 |
6419.T | Mars Group Holdings Corp | 0.01 | 0.54 | 0.54 |
6858.HK | Honma Golf Ltd | 0.24 | 0.08 | 0.07 |
7816.T | Snow Peak Inc | 0.3 | 1.11 | 0.92 |
7841.T | Endo Manufacturing Co Ltd | 0.03 | 0.71 | 0.69 |
7847.T | Graphite Design Inc | 0.18 | 0.48 | 0.43 |
7906.T | Yonex Co Ltd | 0.04 | 0.88 | 0.86 |
7983.T | Miroku Corp | 1.59 | 0.55 | 0.26 |
7991.T | Mamiya-OP Co Ltd | 0.55 | 1.02 | 0.74 |
Low | High | |
Unlevered beta | 0.54 | 0.74 |
Relevered beta | 1.07 | 1.33 |
Adjusted relevered beta | 1.05 | 1.22 |
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 7865.T:
cost_of_equity (9.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.05) + 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.