8704.T WACC - Weighted Average Cost of Capital

The WACC of Traders Holdings Co Ltd (8704.T) is 8.2%.

The Cost of Equity of Traders Holdings Co Ltd (8704.T) is 8.60%.

The Cost of Debt of Traders Holdings Co Ltd (8704.T) is 4.25%.

	Range	Selected
Cost of equity	7.20% - 10.00%	8.60%
Tax rate	14.50% - 19.30%	16.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.9% - 9.5%	8.2%

WACC

8704.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.95	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.00%

Tax rate	14.50%	19.30%
Debt/Equity ratio	0.08	0.08
Cost of debt	4.00%	4.50%

After-tax WACC	6.9%	9.5%


Selected WACC	8.2%

8704.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 8704.T:

cost_of_equity (8.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.95) + 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.