As of today (2026-07-03), Japan Excellent's weighted average cost of capital is 2.32%%. Japan Excellent's ROIC % is 3.48% (calculated using TTM income statement data).
Japan Excellent generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Japan Excellent (TSE:8987) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Japan Excellent's weighted average cost of capital is 2.32%%. Japan Excellent's ROIC % is 3.48% (calculated using TTM income statement data).
Japan Excellent generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
Related Terms
Japan Excellent WACC % Historical Data
* Premium members only.
The historical data trend for Japan Excellent's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the REIT - Office subindustry, Japan Excellent's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Japan Excellent WACC % vs REITs Industry
For the REITs industry and Real Estate sector, Japan Excellent's WACC % distribution charts can be found below:
* The bar in red indicates where Japan Excellent's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Japan Excellent's market capitalization (E) is 円176796.719 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2025, Japan Excellent's latest one-year semi-annual average Book Value of Debt (D) is 円130200 Mil.
a) weight of equity = E / (E + D) = 176796.719 / (176796.719 + 130200) = 0.5759
b) weight of debt = D / (E + D) = 130200 / (176796.719 + 130200) = 0.4241
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 2.65%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Japan Excellent's beta is 0.1072.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 2.65% + 0.1072 * 6% = 3.2932%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
As of Dec. 2025, Japan Excellent's interest expense (positive number) was 円1305.418 Mil. Its total Book Value of Debt (D) is 円130200 Mil.
Cost of Debt = 1305.418 / 130200 = 1.0026%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 1.89 / 8804.586 = 0.02%.
Japan Excellent's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.5759
*
3.2932%
+
0.4241
*
1.0026%
*
(1 - 0.02%)
=
2.32%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Japan Excellent (TSE:8987) has a WACC % of 2.32% as of Jul. 03, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Japan Excellent and its competitors. This is 28% above median its historical median of 1.81. Over the past decade, Japan Excellent's WACC % has ranged from 0.25 to 3.54. According to the industry distribution chart, Japan Excellent ranks #69 out of 968 companies in the REITs industry, placing it in the top 7.1%.
Is Japan Excellent's WACC % too high?
Japan Excellent's current WACC % of 2.32% is 28% above median its 10-year median of 1.81. Over the past 10 years, this metric has ranged from a low of 0.25 to a high of 3.54. The REITs industry median WACC % is 6.57. Japan Excellent's value of 2.32% is 64.7% below this industry median. Based on the distribution chart, Japan Excellent ranks #69 out of 968 companies in the REITs industry, which is in the top quartile — a strong position relative to peers. Overall, Japan Excellent has a GF Score™ of 68/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Japan Excellent's WACC % compare to BXP and ARE?
According to the REITs industry distribution chart, Japan Excellent ranks #69 out of 968 companies for WACC %. This places Japan Excellent in the top 7% of its industry — outperforming the majority of peers. The industry median WACC % is 6.57. Japan Excellent's value of 2.32% is 64.7% below this benchmark. Historically, Japan Excellent's own WACC % has ranged from 0.25 to 3.54 over the past decade. While the company's 10-year median is 1.81 vs. the industry median of 6.57, Japan Excellent has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a REITs company?
The median WACC % among REITs companies is 6.57, based on 968 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Japan Excellent's current WACC % of 2.32% is 64.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Japan Excellent and its competitors. For the REITs industry, the median WACC % is 6.57 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Japan Excellent's current WACC % is 2.32%, which is 28% above median its own 10-year median of 1.81. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Japan Excellent stock overvalued right now?
Based on GuruFocus' analysis, Japan Excellent (TSE:8987) is currently considered Fairly Valued. The stock's GF Value™ is 円128,672.57, compared to a current price of 円137,000.00 — trading 6.5% above its estimated fair value. The current WACC % is 2.32%, which is 28% above median its 10-year median of 1.81 and 64.7% below the REITs industry median of 6.57. Japan Excellent's overall GF Score™ is 68/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Japan Excellent (TSE:8987), the current WACC % is 2.32% as of Jul. 03, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Japan Excellent (TSE:8987) Overvalued in 2026?
Based on GuruFocus' analysis, Japan Excellent stock appears to be overvalued.
The current stock price of 円137,000.00 is trading 6.5% above its estimated GF Value™ of 円128,672.57.
GuruFocus considers Japan Excellent to be Fairly Valued.
Key valuation signals for TSE:8987:
WACC %: 2.32% (28% above median its 10-year median of 1.81)
GF Value™: 円128,672.57 vs. price of 円137,000.00 (6.5% above fair value)
Industry Position: 64.7% below the REITs median (#69 of 968)
No single metric tells the full story. See the TSE:8987 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Japan Excellent Inc is a real estate investment trust. It mainly invests in office buildings located in major metropolitan areas and pursues to create a portfolio that produces stable growth of income by acquiring properties. The company's portfolio of assets is managed by Japan Excellent Asset Management Co., Ltd.
68GF Score
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