9695.T WACC - Weighted Average Cost of Capital

The WACC of Kamogawa Grand Hotel Ltd (9695.T) is 5.2%.

The Cost of Equity of Kamogawa Grand Hotel Ltd (9695.T) is 6.30%.

The Cost of Debt of Kamogawa Grand Hotel Ltd (9695.T) is 5.50%.

	Range	Selected
Cost of equity	4.60% - 8.00%	6.30%
Tax rate	10.20% - 16.30%	13.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.9% - 6.5%	5.2%

WACC

9695.T WACC calculation

Category	Low	High

Long-term bond rate	0.8%	1.2%
Equity market risk premium	5.4%	6.4%
Adjusted beta	0.7	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.60%	8.00%

Tax rate	10.20%	16.30%
Debt/Equity ratio	2.28	2.28
Cost of debt	4.00%	7.00%

After-tax WACC	3.9%	6.5%


Selected WACC	5.2%

9695.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 9695.T:

cost_of_equity (6.30%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (0.7) + 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.