5940.T WACC - Weighted Average Cost of Capital

The WACC of Fujisash Co Ltd (5940.T) is 5.5%.

The Cost of Equity of Fujisash Co Ltd (5940.T) is 11.90%.

The Cost of Debt of Fujisash Co Ltd (5940.T) is 4.25%.

	Range	Selected
Cost of equity	9.00% - 14.80%	11.90%
Tax rate	23.60% - 25.80%	24.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.6% - 6.3%	5.5%

WACC

5940.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.25	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	14.80%

Tax rate	23.60%	25.80%
Debt/Equity ratio	2.81	2.81
Cost of debt	4.00%	4.50%

After-tax WACC	4.6%	6.3%


Selected WACC	5.5%

5940.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 5940.T:

cost_of_equity (11.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.25) + 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.