8771.T WACC - Weighted Average Cost of Capital
The WACC of eGuarantee Inc (8771.T) is 6.5%.
| Range | Selected | |
| Cost of equity | 6.7% - 12.3% | 9.5% |
| Tax rate | 30.1% - 30.4% | 30.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 7.9% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.87 | 1.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 12.3% |
| Tax rate | 30.1% | 30.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 7.9% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8771.T | eGuarantee Inc | 0.86 | 0.65 | 0.4 |
| 600139.SS | Sichuan Western Resources Holding Co Ltd | 0.14 | 1.75 | 1.59 |
| 6069.HK | Sheng Ye Capital Ltd | 0.44 | 0.44 | 0.34 |
| 7148.T | Financial Products Group Co Ltd | 0.75 | 1.47 | 0.96 |
| 7164.T | Zenkoku Hosho Co Ltd | 0.07 | 0.45 | 0.43 |
| 7172.T | Japan Investment Adviser Co Ltd | 1.43 | 1.88 | 0.94 |
| 7187.T | J-Lease Co Ltd | 0.05 | 0.95 | 0.92 |
| 7196.T | Casa Inc | 0.02 | 0.51 | 0.5 |
| 8421.T | Shinkin Central Bank | 5.27 | 0.23 | 0.05 |
| 8511.T | Japan Securities Finance Co Ltd | 66.17 | 1 | 0.02 |
| 8732.T | Money Partners Group Co Ltd | 0.07 | 1.39 | 1.32 |
| Low | High | |
| Unlevered beta | 0.43 | 0.92 |
| Relevered beta | 0.81 | 1.58 |
| Adjusted relevered beta | 0.87 | 1.39 |
8771.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 8771.T:
cost_of_equity (9.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.87) + 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.