5341.T WACC - Weighted Average Cost of Capital

The WACC of Asahi Eito Co Ltd (5341.T) is 8.1%.

The Cost of Equity of Asahi Eito Co Ltd (5341.T) is 9.25%.

The Cost of Debt of Asahi Eito Co Ltd (5341.T) is 5.50%.

	Range	Selected
Cost of equity	7.60% - 10.90%	9.25%
Tax rate	4.90% - 7.10%	6.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.5% - 9.6%	8.1%

WACC

5341.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.02	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	10.90%

Tax rate	4.90%	7.10%
Debt/Equity ratio	0.42	0.42
Cost of debt	4.00%	7.00%

After-tax WACC	6.5%	9.6%


Selected WACC	8.1%

5341.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 5341.T:

cost_of_equity (9.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.02) + 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.