7887.T WACC - Weighted Average Cost of Capital
The WACC of Nankai Plywood Co Ltd (7887.T) is 4.5%.
| Range | Selected | |
| Cost of equity | 4.7% - 6.7% | 5.7% |
| Tax rate | 27.7% - 30.6% | 29.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 3.9% - 5.1% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.55 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.7% | 6.7% |
| Tax rate | 27.7% | 30.6% |
| Debt/Equity ratio | 0.79 | 0.79 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 3.9% | 5.1% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7887.T | Nankai Plywood Co Ltd | 0.79 | 0.31 | 0.2 |
| 000180.KS | Sungchang Enterprise Holdings Ltd | 0.45 | 0.28 | 0.21 |
| 3896.T | Awa Paper & Technological Company Inc | 1.87 | 0.8 | 0.35 |
| 7808.T | C.S. Lumber Co Inc | 1.59 | 0.51 | 0.24 |
| 7815.T | Tokyo Board Industries Co Ltd | 4.72 | 1.28 | 0.3 |
| 7827.T | Orvis Corp | 1.99 | 0.42 | 0.18 |
| 7897.T | Hokushin Co Ltd | 1.43 | 0.6 | 0.3 |
| 7898.T | Wood One Co Ltd | 4.83 | 0.75 | 0.17 |
| 7905.T | Daiken Corp | 0.38 | -0.32 | -0.25 |
| BRI.AX | Big River Industries Ltd | 0.78 | 0.44 | 0.28 |
| Low | High | |
| Unlevered beta | 0.21 | 0.26 |
| Relevered beta | 0.33 | 0.4 |
| Adjusted relevered beta | 0.55 | 0.6 |
7887.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 7887.T:
cost_of_equity (5.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.55) + 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.