5950.T WACC - Weighted Average Cost of Capital
The WACC of Japan Power Fastening Co Ltd (5950.T) is 6.3%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.3% | 7.25% |
| Tax rate | 5.1% - 20.6% | 12.85% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.3% - 7.2% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.79 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.3% |
| Tax rate | 5.1% | 20.6% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.3% | 7.2% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5950.T | Japan Power Fastening Co Ltd | 0.63 | 0.67 | 0.42 |
| 5939.T | Otani Kogyo Co Ltd | 0.11 | 0.52 | 0.47 |
| 5964.T | Toyo Knife Co Ltd | 0.52 | 0.66 | 0.44 |
| 6131.T | Hamai Co Ltd | 0.44 | 0.04 | 0.03 |
| 6150.T | Takeda Machinery Co Ltd | 0.5 | 0.67 | 0.46 |
| 6307.T | Sansei Co Ltd | 0.1 | 0.44 | 0.41 |
| 6338.T | Takatori Corp | 0.42 | 2.01 | 1.44 |
| 6396.T | Unozawa-gumi Iron Works Ltd | 0.69 | 0.87 | 0.53 |
| 6400.T | Fuji Seiki Co Ltd | 1.48 | 0.53 | 0.22 |
| 6492.T | Okano Valve Mfg. Co Ltd | 0.08 | 1.19 | 1.11 |
| Low | High | |
| Unlevered beta | 0.43 | 0.46 |
| Relevered beta | 0.69 | 0.75 |
| Adjusted relevered beta | 0.79 | 0.83 |
5950.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 5950.T:
cost_of_equity (7.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.