5386.T
Tsuruya Co Ltd
Price:  
403 
JPY
Volume:  
15,400
Japan | Building Products

5386.T WACC - Weighted Average Cost of Capital

The WACC of Tsuruya Co Ltd (5386.T) is 5.6%.

The Cost of Equity of Tsuruya Co Ltd (5386.T) is 6.75%.
The Cost of Debt of Tsuruya Co Ltd (5386.T) is 4.25%.

RangeSelected
Cost of equity5.7% - 7.8%6.75%
Tax rate32.1% - 33.8%32.95%
Cost of debt4.0% - 4.5%4.25%
WACC4.8% - 6.4%5.6%
WACC

5386.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.70.76
Additional risk adjustments0.0%0.5%
Cost of equity5.7%7.8%
Tax rate32.1%33.8%
Debt/Equity ratio
0.410.41
Cost of debt4.0%4.5%
After-tax WACC4.8%6.4%
Selected WACC5.6%

5386.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 5386.T:

cost_of_equity (6.75%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.