8527.T WACC - Weighted Average Cost of Capital
The WACC of Aichi Bank Ltd (8527.T) is 4.8%.
| Range | Selected | |
| Cost of equity | 13.1% - 22.9% | 18% |
| Tax rate | 29.0% - 29.6% | 29.3% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.4% - 5.2% | 4.8% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.91 | 2.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.1% | 22.9% |
| Tax rate | 29.0% | 29.6% |
| Debt/Equity ratio | 10.48 | 10.48 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.4% | 5.2% |
| Selected WACC | 4.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8527.T | Aichi Bank Ltd | 10.48 | 0.78 | 0.09 |
| 8337.T | Chiba Kogyo Bank Ltd | 0.51 | 1.56 | 1.15 |
| 8343.T | Akita Bank Ltd | 1.58 | 0.97 | 0.46 |
| 8344.T | Yamagata Bank Ltd | 2.78 | 0.87 | 0.29 |
| 8360.T | Yamanashi Chuo Bank Ltd | 5.26 | 1.26 | 0.27 |
| 8387.T | Shikoku Bank Ltd | 1.39 | 0.88 | 0.44 |
| 8399.T | Bank of The Ryukyus Ltd | 0.39 | 1.15 | 0.9 |
| 8551.T | Kita-Nippon Bank Ltd | 0.07 | 1.17 | 1.11 |
| 8558.T | Towa Bank Ltd | 4.22 | 0.94 | 0.24 |
| 8713.T | Fidea Holdings Co Ltd | 3.89 | 0.8 | 0.21 |
| Low | High | |
| Unlevered beta | 0.28 | 0.45 |
| Relevered beta | 2.36 | 3.81 |
| Adjusted relevered beta | 1.91 | 2.88 |
8527.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 8527.T:
cost_of_equity (18.00%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.91) + 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.