7878.T WACC - Weighted Average Cost of Capital
The WACC of Kohsai Co Ltd (7878.T) is 4.5%.
| Range | Selected | |
| Cost of equity | 4.5% - 7.3% | 5.9% |
| Tax rate | 37.5% - 39.5% | 38.5% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 3.7% - 5.4% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.5 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.5% | 7.3% |
| Tax rate | 37.5% | 39.5% |
| Debt/Equity ratio | 0.69 | 0.69 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 3.7% | 5.4% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7878.T | Kohsai Co Ltd | 0.69 | 0.99 | 0.7 |
| 3045.T | Kawasaki & Co Ltd | 0.44 | 0.3 | 0.24 |
| 3376.T | Only Corp | 0.25 | 0.47 | 0.41 |
| 7771.T | Nihon Seimitsu Co Ltd | 1.45 | 0.68 | 0.36 |
| 7829.T | Samantha Thavasa Japan Ltd | 4.35 | -0.07 | -0.02 |
| 7872.T | Estelle Holdings Co Ltd | 1.46 | 0.17 | 0.09 |
| 8011.T | Sanyo Shokai Ltd | 0.21 | 0.69 | 0.61 |
| 8107.T | Kimuratan Corp | 0.62 | 1.41 | 1.02 |
| 8114.T | Descente Ltd | 0.03 | -0.01 | -0.01 |
| 8139.T | Nagahori Corp | 0.4 | 0.09 | 0.07 |
| Low | High | |
| Unlevered beta | 0.18 | 0.38 |
| Relevered beta | 0.25 | 0.54 |
| Adjusted relevered beta | 0.5 | 0.69 |
7878.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 7878.T:
cost_of_equity (5.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.5) + 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.