9704.T WACC - Weighted Average Cost of Capital

The WACC of Agora Hospitality Group Co Ltd (9704.T) is 5.6%.

The Cost of Equity of Agora Hospitality Group Co Ltd (9704.T) is 6.25%.

The Cost of Debt of Agora Hospitality Group Co Ltd (9704.T) is 4.25%.

	Range	Selected
Cost of equity	4.70% - 7.80%	6.25%
Tax rate	8.20% - 18.80%	13.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.4% - 6.8%	5.6%

WACC

9704.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.53	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	7.80%

Tax rate	8.20%	18.80%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.00%	4.50%

After-tax WACC	4.4%	6.8%


Selected WACC	5.6%

9704.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 9704.T:

cost_of_equity (6.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.53) + 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.