4100.T WACC - Weighted Average Cost of Capital

The WACC of Toda Kogyo Corp (4100.T) is 5.8%.

The Cost of Equity of Toda Kogyo Corp (4100.T) is 10.45%.

The Cost of Debt of Toda Kogyo Corp (4100.T) is 5.50%.

	Range	Selected
Cost of equity	7.90% - 13.00%	10.45%
Tax rate	11.10% - 13.40%	12.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.3% - 7.3%	5.8%

WACC

4100.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.06	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	13.00%

Tax rate	11.10%	13.40%
Debt/Equity ratio	4.49	4.49
Cost of debt	4.00%	7.00%

After-tax WACC	4.3%	7.3%


Selected WACC	5.8%

4100.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 4100.T:

cost_of_equity (10.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.