9012.T WACC - Weighted Average Cost of Capital
The WACC of Chichibu Railway Co Ltd (9012.T) is 3.5%.
| Range | Selected | |
| Cost of equity | 4.2% - 6.2% | 5.2% |
| Tax rate | 28.9% - 49.0% | 38.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 3.3% - 3.7% | 3.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.46 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.2% | 6.2% |
| Tax rate | 28.9% | 49.0% |
| Debt/Equity ratio | 1.83 | 1.83 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 3.3% | 3.7% |
| Selected WACC | 3.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 9012.T | Chichibu Railway Co Ltd | 1.83 | 0.09 | 0.04 |
| 9003.T | Sotetsu Holdings Inc | 2.02 | 0.33 | 0.14 |
| 9005.T | Tokyu Corp | 1.16 | 0.16 | 0.09 |
| 9014.T | Shin-Keisei Electric Railway Co Ltd | 0.33 | 0.36 | 0.3 |
| 9017.T | Niigata Kotsu Co Ltd | 3.51 | 0.14 | 0.04 |
| 9033.T | Hiroshima Electric Railway Co Ltd | 1.46 | 0.17 | 0.09 |
| 9044.T | Nankai Electric Railway Co Ltd | 1.71 | 0.64 | 0.3 |
| 9046.T | Kobe Electric Railway Co Ltd | 3.06 | 0.43 | 0.15 |
| 9049.T | Keifuku Electric Railroad Co Ltd | 0.57 | 0.45 | 0.33 |
| 9082.T | Daiwa Motor Transportation Co Ltd | 3.2 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.09 | 0.15 |
| Relevered beta | 0.19 | 0.31 |
| Adjusted relevered beta | 0.46 | 0.54 |
9012.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 9012.T:
cost_of_equity (5.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.46) + 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.