1711.T WACC - Weighted Average Cost of Capital

The WACC of SDS Holdings Co Ltd (1711.T) is 14.4%.

The Cost of Equity of SDS Holdings Co Ltd (1711.T) is 5.70%.

The Cost of Debt of SDS Holdings Co Ltd (1711.T) is 26.10%.

	Range	Selected
Cost of equity	4.20% - 7.20%	5.70%
Tax rate	17.20% - 31.80%	24.50%
Cost of debt	18.40% - 33.80%	26.10%
WACC	11.4% - 17.5%	14.4%

WACC

1711.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.45	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.20%	7.20%

Tax rate	17.20%	31.80%
Debt/Equity ratio	1.86	1.86
Cost of debt	18.40%	33.80%

After-tax WACC	11.4%	17.5%


Selected WACC	14.4%

1711.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 1711.T:

cost_of_equity (5.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.45) + 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.