7865.T
People Co Ltd
Price:  
527 
JPY
Volume:  
6,000
Japan | Leisure Products

7865.T WACC - Weighted Average Cost of Capital

The WACC of People Co Ltd (7865.T) is 6.5%.

The Cost of Equity of People Co Ltd (7865.T) is 9.45%.
The Cost of Debt of People Co Ltd (7865.T) is 5%.

RangeSelected
Cost of equity7.8% - 11.1%9.45%
Tax rate30.7% - 30.7%30.7%
Cost of debt5.0% - 5.0%5%
WACC5.6% - 7.3%6.5%
WACC

7865.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta1.051.22
Additional risk adjustments0.0%0.5%
Cost of equity7.8%11.1%
Tax rate30.7%30.7%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC5.6%7.3%
Selected WACC6.5%

7865.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 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.