The WACC of Mitsui OSK Lines Ltd (9104.T) is 6.2%.
Range | Selected | |
Cost of equity | 7.3% - 9.7% | 8.5% |
Tax rate | 4.5% - 6.3% | 5.4% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.5% - 6.9% | 6.2% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.96 | 1.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 9.7% |
Tax rate | 4.5% | 6.3% |
Debt/Equity ratio | 1.05 | 1.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.5% | 6.9% |
Selected WACC | 6.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
9104.T | Mitsui OSK Lines Ltd | 1.05 | 0.72 | 0.36 |
9101.T | Nippon Yusen KK | 0.31 | 0.83 | 0.64 |
9107.T | Kawasaki Kisen Kaisha Ltd | 0.27 | 1.33 | 1.06 |
9110.T | NS United Kaiun Kaisha Ltd | 0.91 | 0.92 | 0.5 |
9115.T | Meiji Shipping Co Ltd | 6.87 | 0.74 | 0.1 |
9119.T | Iino Kaiun Kaisha Ltd | 1.11 | 0.94 | 0.46 |
9171.T | Kuribayashi Steamship Co Ltd | 2.2 | 1.46 | 0.48 |
9179.T | Kawasaki Kinkai Kisen Kaisha Ltd | 0.51 | 0.85 | 0.57 |
9310.T | Japan Transcity Corp | 0.52 | 0.87 | 0.58 |
9311.T | Asagami Corp | 1.24 | 0.22 | 0.1 |
Low | High | |
Unlevered beta | 0.47 | 0.53 |
Relevered beta | 0.94 | 1.04 |
Adjusted relevered beta | 0.96 | 1.03 |
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 9104.T:
cost_of_equity (8.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.96) + 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.