The WACC of Fujita Kanko Inc (9722.T) is 5.7%.
Range | Selected | |
Cost of equity | 5.0% - 7.6% | 6.3% |
Tax rate | 15.2% - 20.1% | 17.65% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.6% - 6.7% | 5.7% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.58 | 0.74 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 7.6% |
Tax rate | 15.2% | 20.1% |
Debt/Equity ratio | 0.29 | 0.29 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.6% | 6.7% |
Selected WACC | 5.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
9722.T | Fujita Kanko Inc | 0.29 | 0.95 | 0.77 |
3010.T | Kachikaihatsu Co Ltd | 0.66 | 0.99 | 0.64 |
3772.T | Wealth Management Inc | 1.58 | 0.65 | 0.29 |
6547.T | Greens Co Ltd | 0.47 | 1.07 | 0.78 |
6565.T | ABhotel Co Ltd | 0.53 | 0.9 | 0.63 |
9695.T | Kamogawa Grand Hotel Ltd | 2.28 | 0.59 | 0.21 |
9704.T | Agora Hospitality Group Co Ltd | 0.53 | 0.46 | 0.32 |
9713.T | Royal Hotel Ltd | 0.05 | 0.41 | 0.4 |
9720.T | Hotel Newgrand Co Ltd | 0.36 | 0.12 | 0.09 |
9723.T | Kyoto Hotel Ltd | 1.6 | 0.23 | 0.1 |
Low | High | |
Unlevered beta | 0.31 | 0.49 |
Relevered beta | 0.37 | 0.61 |
Adjusted relevered beta | 0.58 | 0.74 |
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 9722.T:
cost_of_equity (6.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.58) + 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.