1788.T WACC - Weighted Average Cost of Capital

The WACC of Santo Co Ltd (1788.T) is 6.0%.

The Cost of Equity of Santo Co Ltd (1788.T) is 5.90%.

The Cost of Debt of Santo Co Ltd (1788.T) is 14.85%.

	Range	Selected
Cost of equity	4.80% - 7.00%	5.90%
Tax rate	33.30% - 35.00%	34.15%
Cost of debt	4.00% - 25.70%	14.85%
WACC	4.8% - 7.2%	6.0%

WACC

1788.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.56	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	7.00%

Tax rate	33.30%	35.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	25.70%

After-tax WACC	4.8%	7.2%


Selected WACC	6.0%

1788.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 1788.T:

cost_of_equity (5.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + 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.