The WACC of Toho Co Ltd (Tokyo) (9602.T) is 5.5%.
Range | Selected | |
Cost of equity | 4.4% - 6.6% | 5.5% |
Tax rate | 30.7% - 31.4% | 31.05% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.4% - 6.6% | 5.5% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.49 | 0.58 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.4% | 6.6% |
Tax rate | 30.7% | 31.4% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.4% | 6.6% |
Selected WACC | 5.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
9602.T | Toho Co Ltd (Tokyo) | 0 | -0.03 | -0.03 |
4295.T | Faith Inc | 0.08 | -0.04 | -0.04 |
4308.T | J-Stream Inc | 0.01 | 0.57 | 0.56 |
4816.T | Toei Animation Co Ltd | 1.19 | 0.15 | 0.08 |
6879.T | Imagica Group Inc | 0.41 | 0.67 | 0.52 |
7803.T | Bushiroad Inc | 0.31 | 1.04 | 0.85 |
7860.T | Avex Inc | 0 | 0.33 | 0.33 |
9601.T | Shochiku Co Ltd | 0.39 | 0.11 | 0.09 |
9605.T | Toei Co Ltd | 0.05 | 0.32 | 0.31 |
9631.T | Tokyu Recreation Co Ltd | 0.09 | 0.48 | 0.45 |
Low | High | |
Unlevered beta | 0.22 | 0.38 |
Relevered beta | 0.24 | 0.37 |
Adjusted relevered beta | 0.49 | 0.58 |
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 9602.T:
cost_of_equity (5.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.49) + 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.