5947.T WACC - Weighted Average Cost of Capital
The WACC of Rinnai Corp (5947.T) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.0% - 6.9% | 5.95% |
| Tax rate | 25.6% - 25.8% | 25.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.0% - 6.8% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.59 | 0.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 6.9% |
| Tax rate | 25.6% | 25.8% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.0% | 6.8% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5947.T | Rinnai Corp | 0.81 | 0.63 | 0.39 |
| 5951.T | Dainichi Co Ltd | 0 | 0.36 | 0.36 |
| 5962.T | Asaka Industrial Co Ltd | 0.65 | 0.25 | 0.17 |
| 5966.T | Kyoto Tool Co Ltd | 0.14 | 0.46 | 0.42 |
| 6445.T | Janome Sewing Machine Co Ltd | 0.08 | 0.43 | 0.4 |
| 6612.T | Balmuda Inc | 0.06 | 0.38 | 0.37 |
| 6755.T | Fujitsu General Ltd | 0.05 | 0.5 | 0.48 |
| 6897.T | Twinbird Corp | 0.42 | 0.4 | 0.3 |
| 7955.T | Cleanup Corp | 0.29 | 0.6 | 0.5 |
| 7965.T | Zojirushi Corp | 0.03 | 0.73 | 0.71 |
| Low | High | |
| Unlevered beta | 0.38 | 0.41 |
| Relevered beta | 0.39 | 0.45 |
| Adjusted relevered beta | 0.59 | 0.63 |
5947.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 5947.T:
cost_of_equity (5.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.