9534.T WACC - Weighted Average Cost of Capital
The WACC of Hokkaido Gas Co Ltd (9534.T) is 4.9%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.8% | 7.75% |
| Tax rate | 27.3% - 27.6% | 27.45% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.0% - 5.8% | 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 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.8% |
| Tax rate | 27.3% | 27.6% |
| Debt/Equity ratio | 1.55 | 1.55 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.0% | 5.8% |
| Selected WACC | 4.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 9534.T | Hokkaido Gas Co Ltd | 1.55 | 0.74 | 0.35 |
| 1663.T | K&O Energy Group Inc | 0.01 | 1.21 | 1.2 |
| 600635.SS | Shanghai Dazhong Public Utilities Group Co Ltd | 0.7 | 1.07 | 0.71 |
| 603053.SS | Chengdu Gas Group Co Ltd | 0.03 | 0.76 | 0.74 |
| 8174.T | Nippon Gas Co Ltd | 0.16 | 0.22 | 0.2 |
| 9535.T | Hiroshima Gas Co Ltd | 1.96 | 0.49 | 0.2 |
| 9537.T | Hokuriku Gas Co Ltd | 0.07 | 0.14 | 0.13 |
| 9539.T | Keiyo Gas Co Ltd | 0.69 | 0.26 | 0.18 |
| 9543.T | Shizuoka Gas Co Ltd | 0.22 | 0.35 | 0.31 |
| GSPL.NS | Gujarat State Petronet Ltd | 0.01 | 0.91 | 0.91 |
| Low | High | |
| Unlevered beta | 0.26 | 0.49 |
| Relevered beta | 0.57 | 1.04 |
| Adjusted relevered beta | 0.71 | 1.03 |
9534.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 9534.T:
cost_of_equity (7.75%) = 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.