4234.T WACC - Weighted Average Cost of Capital

The WACC of Sun A. Kaken Co Ltd (4234.T) is 6.5%.

The Cost of Equity of Sun A. Kaken Co Ltd (4234.T) is 5.30%.

The Cost of Debt of Sun A. Kaken Co Ltd (4234.T) is 12.70%.

	Range	Selected
Cost of equity	4.20% - 6.40%	5.30%
Tax rate	23.80% - 41.50%	32.65%
Cost of debt	4.00% - 21.40%	12.70%
WACC	3.6% - 9.4%	6.5%

WACC

4234.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	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.20%	6.40%

Tax rate	23.80%	41.50%
Debt/Equity ratio	0.96	0.96
Cost of debt	4.00%	21.40%

After-tax WACC	3.6%	9.4%


Selected WACC	6.5%

4234.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 4234.T:

cost_of_equity (5.30%) = 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.