The WACC of Es-con Japan Ltd (8892.T) is 3.6%.
Range | Selected | |
Cost of equity | 5.4% - 7.9% | 6.65% |
Tax rate | 35.8% - 36.9% | 36.35% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 3.2% - 4.0% | 3.6% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.65 | 0.77 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 7.9% |
Tax rate | 35.8% | 36.9% |
Debt/Equity ratio | 3.37 | 3.37 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 3.2% | 4.0% |
Selected WACC | 3.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8892.T | Es-con Japan Ltd | 3.37 | 0.63 | 0.2 |
1420.T | Sanyo Homes Corp | 2.13 | 0.34 | 0.15 |
1448.T | Space Value Holdings Co Ltd | 0.62 | 1.01 | 0.73 |
1451.T | KHC Ltd | 1.63 | 0.33 | 0.16 |
3284.T | Hoosiers Holdings | 2.3 | 0.63 | 0.26 |
3293.T | Azuma House Co Ltd | 2.11 | 0.27 | 0.11 |
3294.T | e'grand Co Ltd | 1.98 | 0.31 | 0.14 |
8860.T | Fuji Corp Ltd | 4.32 | 0.83 | 0.22 |
8904.T | Avantia Co Ltd | 2.83 | 0.31 | 0.11 |
8935.T | FJ Next Co Ltd | 0.45 | 0.68 | 0.53 |
Low | High | |
Unlevered beta | 0.15 | 0.21 |
Relevered beta | 0.48 | 0.66 |
Adjusted relevered beta | 0.65 | 0.77 |
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 8892.T:
cost_of_equity (6.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.65) + 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.