8617.T WACC - Weighted Average Cost of Capital
The WACC of Kosei Securities Co Ltd (8617.T) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.7% | 6.5% |
| Tax rate | 1.2% - 6.9% | 4.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.56 | 0.68 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.3% | 7.7% |
| Tax rate | 1.2% | 6.9% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8617.T | Kosei Securities Co Ltd | 0.1 | 0.89 | 0.81 |
| 7175.T | Imamura Securities Co Ltd | 0.15 | 0.98 | 0.85 |
| 7177.T | GMO Financial Holdings Inc | 2.62 | 0.88 | 0.25 |
| 7360.T | Ondeck Co Ltd | 0.02 | 0.36 | 0.36 |
| 8616.T | Tokai Tokyo Financial Holdings Inc | 5.43 | 1.07 | 0.17 |
| 8628.T | Matsui Securities Co Ltd | 1.94 | 0.51 | 0.17 |
| 8700.T | Maruhachi Securities Co Ltd | 0.03 | 0.48 | 0.47 |
| 8705.T | Okato Nissan Securities Holdings Inc | 0.63 | 0.77 | 0.48 |
| 8737.T | Akatsuki Corp | 2.55 | 0.74 | 0.21 |
| 8742.T | Kobayashi Yoko Co Ltd | 0.02 | 0.49 | 0.48 |
| Low | High | |
| Unlevered beta | 0.31 | 0.47 |
| Relevered beta | 0.34 | 0.52 |
| Adjusted relevered beta | 0.56 | 0.68 |
8617.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 8617.T:
cost_of_equity (6.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.