1840.T WACC - Weighted Average Cost of Capital

The WACC of Tsuchiya Holdings Co Ltd (1840.T) is 7.9%.

The Cost of Equity of Tsuchiya Holdings Co Ltd (1840.T) is 7.55%.

The Cost of Debt of Tsuchiya Holdings Co Ltd (1840.T) is 13.25%.

	Range	Selected
Cost of equity	6.00% - 9.10%	7.55%
Tax rate	29.60% - 37.30%	33.45%
Cost of debt	4.00% - 22.50%	13.25%
WACC	4.7% - 11.1%	7.9%

WACC

1840.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.75	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	9.10%

Tax rate	29.60%	37.30%
Debt/Equity ratio	0.69	0.69
Cost of debt	4.00%	22.50%

After-tax WACC	4.7%	11.1%


Selected WACC	7.9%

1840.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 1840.T:

cost_of_equity (7.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.75) + 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.