9978.T WACC - Weighted Average Cost of Capital

The WACC of Bunkyodo Group Holdings Co Ltd (9978.T) is 4.4%.

The Cost of Equity of Bunkyodo Group Holdings Co Ltd (9978.T) is 5.25%.

The Cost of Debt of Bunkyodo Group Holdings Co Ltd (9978.T) is 4.50%.

	Range	Selected
Cost of equity	4.20% - 6.30%	5.25%
Tax rate	9.70% - 14.30%	12.00%
Cost of debt	4.00% - 5.00%	4.50%
WACC	3.8% - 4.9%	4.4%

WACC

9978.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.46	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.20%	6.30%

Tax rate	9.70%	14.30%
Debt/Equity ratio	2.12	2.12
Cost of debt	4.00%	5.00%

After-tax WACC	3.8%	4.9%


Selected WACC	4.4%

9978.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 9978.T:

cost_of_equity (5.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.46) + 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.