The WACC of JBCC Holdings Inc (9889.T) is 7.2%.
Range | Selected | |
Cost of equity | 6.1% - 8.6% | 7.35% |
Tax rate | 30.5% - 31.3% | 30.9% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.0% - 8.4% | 7.2% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.77 | 0.87 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.1% | 8.6% |
Tax rate | 30.5% | 31.3% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.0% | 8.4% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
9889.T | JBCC Holdings Inc | 0.03 | 0.75 | 0.73 |
3630.T | Densan System Co Ltd | 0.04 | 0.53 | 0.52 |
3636.T | Mitsubishi Research Institute Inc | 0.02 | 0.96 | 0.95 |
3857.T | LAC Co Ltd | 0 | 0.72 | 0.72 |
4685.T | Ryoyu Systems Co Ltd | 0 | 1.04 | 1.04 |
4722.T | Future Corp | 0.08 | 0.47 | 0.44 |
4725.T | CAC Holdings Corp | 0.05 | 0.55 | 0.53 |
4726.T | SB Technology Corp | 0.01 | 0.49 | 0.48 |
4832.T | JFE Systems Inc | 0.06 | 0.89 | 0.86 |
9600.T | I-Net Corp | 0.34 | 1.17 | 0.95 |
Low | High | |
Unlevered beta | 0.64 | 0.78 |
Relevered beta | 0.66 | 0.81 |
Adjusted relevered beta | 0.77 | 0.87 |
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 9889.T:
cost_of_equity (7.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.