3004.T WACC - Weighted Average Cost of Capital

The WACC of Shinyei Kaisha (3004.T) is 5.6%.

The Cost of Equity of Shinyei Kaisha (3004.T) is 9.55%.

The Cost of Debt of Shinyei Kaisha (3004.T) is 4.25%.

	Range	Selected
Cost of equity	6.70% - 12.40%	9.55%
Tax rate	15.60% - 16.40%	16.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.5% - 6.8%	5.6%

WACC

3004.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.87	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	12.40%

Tax rate	15.60%	16.40%
Debt/Equity ratio	1.88	1.88
Cost of debt	4.00%	4.50%

After-tax WACC	4.5%	6.8%


Selected WACC	5.6%

3004.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 3004.T:

cost_of_equity (9.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.87) + 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.