8798.T WACC - Weighted Average Cost of Capital

The WACC of Advance Create Co Ltd (8798.T) is 5.5%.

The Cost of Equity of Advance Create Co Ltd (8798.T) is 6.40%.

The Cost of Debt of Advance Create Co Ltd (8798.T) is 5.50%.

	Range	Selected
Cost of equity	4.80% - 8.00%	6.40%
Tax rate	22.40% - 32.00%	27.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.2% - 6.8%	5.5%

WACC

8798.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.48	0.72

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.80%	8.00%

Tax rate	22.40%	32.00%
Debt/Equity ratio	0.59	0.59
Cost of debt	4.00%	7.00%

After-tax WACC	4.2%	6.8%


Selected WACC	5.5%

8798.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 8798.T:

cost_of_equity (6.40%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.48) + 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.