8854.T WACC - Weighted Average Cost of Capital
The WACC of Japan Living Service Co Ltd (8854.T) is 4.9%.
| Range | Selected | |
| Cost of equity | 5.7% - 8.5% | 7.1% |
| Tax rate | 33.9% - 38.4% | 36.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.2% - 5.6% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.71 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 8.5% |
| Tax rate | 33.9% | 38.4% |
| Debt/Equity ratio | 0.99 | 0.99 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.2% | 5.6% |
| Selected WACC | 4.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8854.T | Japan Living Service Co Ltd | 0.99 | 0.67 | 0.41 |
| 3241.T | Will Co Ltd | 1.68 | 0.4 | 0.19 |
| 3469.T | Dualtap Co Ltd | 0.86 | 0.07 | 0.05 |
| 3489.T | FaithNetwork Co Ltd | 0.8 | 0.9 | 0.59 |
| 3528.T | Prospect Co Ltd | 0.59 | 1.26 | 0.92 |
| 5280.T | Yoshicon Co Ltd | 0.51 | 0.62 | 0.47 |
| 8836.T | Rise Inc | 0.02 | 1 | 0.99 |
| 8903.T | Sunwood Corp | 3.63 | 0.06 | 0.02 |
| 8908.T | Mainichi Comnet Co Ltd | 0.89 | 0.38 | 0.24 |
| 8927.T | Meiho Enterprise Co Ltd | 1.59 | 0.98 | 0.48 |
| Low | High | |
| Unlevered beta | 0.34 | 0.48 |
| Relevered beta | 0.57 | 0.79 |
| Adjusted relevered beta | 0.71 | 0.86 |
8854.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 8854.T:
cost_of_equity (7.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.71) + 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.