9022.T WACC - Weighted Average Cost of Capital
The WACC of Central Japan Railway Co (9022.T) is 4.6%.
| Range | Selected | |
| Cost of equity | 5.1% - 8.4% | 6.75% |
| Tax rate | 26.8% - 27.7% | 27.25% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 3.8% - 5.4% | 4.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.6 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 8.4% |
| Tax rate | 26.8% | 27.7% |
| Debt/Equity ratio | 1.41 | 1.41 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 3.8% | 5.4% |
| Selected WACC | 4.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 9022.T | Central Japan Railway Co | 1.41 | 0.41 | 0.21 |
| 601816.SS | Beijing-Shanghai High Speed Railway Co Ltd | 0.19 | 0.6 | 0.52 |
| 9005.T | Tokyu Corp | 1.24 | 0.19 | 0.1 |
| 9009.T | Keisei Electric Railway Co Ltd | 0.5 | 0.79 | 0.58 |
| 9020.T | East Japan Railway Co | 1.38 | 0.18 | 0.09 |
| 9021.T | West Japan Railway Co | 1.01 | 0.48 | 0.28 |
| 9041.T | Kintetsu Group Holdings Co Ltd | 2.51 | 0.54 | 0.19 |
| 9042.T | Hankyu Hanshin Holdings Inc | 1.35 | 0.29 | 0.15 |
| 9062.T | Nippon Express Co Ltd | 0.73 | 1.21 | 0.79 |
| 9065.T | Sankyu Inc | 0.19 | 0.73 | 0.64 |
| Low | High | |
| Unlevered beta | 0.2 | 0.38 |
| Relevered beta | 0.4 | 0.76 |
| Adjusted relevered beta | 0.6 | 0.84 |
9022.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 9022.T:
cost_of_equity (6.75%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.6) + 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.