8395.T WACC - Weighted Average Cost of Capital
The WACC of Bank of Saga Ltd (8395.T) is 4.6%.
| Range | Selected | |
| Cost of equity | 5.3% - 8.4% | 6.85% |
| Tax rate | 33.0% - 37.6% | 35.3% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.1% - 5.2% | 4.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.64 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 8.4% |
| Tax rate | 33.0% | 37.6% |
| Debt/Equity ratio | 1.61 | 1.61 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.1% | 5.2% |
| Selected WACC | 4.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8395.T | Bank of Saga Ltd | 1.61 | 1.2 | 0.6 |
| 7161.T | Jimoto Holdings Inc | 15.09 | 0.61 | 0.06 |
| 8337.T | Chiba Kogyo Bank Ltd | 0.37 | 1.55 | 1.26 |
| 8338.T | Tsukuba Bank Ltd | 8.82 | 1.43 | 0.22 |
| 8343.T | Akita Bank Ltd | 4.84 | 0.97 | 0.24 |
| 8350.T | Michinoku Bank Ltd | 6.96 | 0.6 | 0.11 |
| 8527.T | Aichi Bank Ltd | 10.48 | 0.78 | 0.1 |
| 8550.T | Tochigi Bank Ltd | 0.98 | 1.44 | 0.89 |
| 8551.T | Kita-Nippon Bank Ltd | 0.07 | 1.19 | 1.13 |
| 8558.T | Towa Bank Ltd | 4.69 | 0.94 | 0.24 |
| Low | High | |
| Unlevered beta | 0.23 | 0.38 |
| Relevered beta | 0.46 | 0.78 |
| Adjusted relevered beta | 0.64 | 0.85 |
8395.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 8395.T:
cost_of_equity (6.85%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.64) + 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.