5967.T WACC - Weighted Average Cost of Capital

The WACC of Tone Co Ltd (5967.T) is 12.4%.

The Cost of Equity of Tone Co Ltd (5967.T) is 5.90%.

The Cost of Debt of Tone Co Ltd (5967.T) is 75.40%.

	Range	Selected
Cost of equity	4.90% - 6.90%	5.90%
Tax rate	29.40% - 30.40%	29.90%
Cost of debt	4.00% - 146.80%	75.40%
WACC	4.6% - 20.3%	12.4%

WACC

5967.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.57	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	6.90%

Tax rate	29.40%	30.40%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.00%	146.80%

After-tax WACC	4.6%	20.3%


Selected WACC	12.4%

5967.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 5967.T:

cost_of_equity (5.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.57) + 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.