9829.T WACC - Weighted Average Cost of Capital

The WACC of Nagano Tokyu Department Store Co Ltd (9829.T) is 4.3%.

The Cost of Equity of Nagano Tokyu Department Store Co Ltd (9829.T) is 5.90%.

The Cost of Debt of Nagano Tokyu Department Store Co Ltd (9829.T) is 5.50%.

	Range	Selected
Cost of equity	4.70% - 7.10%	5.90%
Tax rate	21.50% - 31.60%	26.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.4% - 5.2%	4.3%

WACC

9829.T WACC calculation

Category	Low	High

Long-term bond rate	0.8%	1.2%
Equity market risk premium	5.4%	6.4%
Adjusted beta	0.72	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	7.10%

Tax rate	21.50%	31.60%
Debt/Equity ratio	3.95	3.95
Cost of debt	4.00%	7.00%

After-tax WACC	3.4%	5.2%


Selected WACC	4.3%

9829.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 9829.T:

cost_of_equity (5.90%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (0.72) + 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.