6018.T WACC - Weighted Average Cost of Capital
The WACC of Hanshin Diesel Works Ltd (6018.T) is 7.5%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.8% | 7.6% |
| Tax rate | 29.4% - 29.9% | 29.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 8.6% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.82 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.8% |
| Tax rate | 29.4% | 29.9% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 8.6% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6018.T | Hanshin Diesel Works Ltd | 1.09 | 1.13 | 0.64 |
| 3447.T | Shinwa Co Ltd | 0.99 | 0.45 | 0.27 |
| 6016.T | Japan Engine Corp | 0.07 | 1.44 | 1.37 |
| 6022.T | Akasaka Diesels Ltd | 0.49 | 1.03 | 0.77 |
| 6294.T | Okada Aiyon Corp | 0.8 | 0.95 | 0.61 |
| 6306.T | Nikko Co Ltd | 0.35 | 0.55 | 0.44 |
| 6358.T | Sakai Heavy Industries Ltd | 0.31 | 0.98 | 0.81 |
| 7018.T | Naikai Zosen Corp | 0.46 | 1.57 | 1.19 |
| 7022.T | Sanoyas Holdings Corp | 0.87 | 1.06 | 0.66 |
| 7122.T | Kinki Sharyo Co Ltd | 0.4 | 1.1 | 0.86 |
| Low | High | |
| Unlevered beta | 0.65 | 0.78 |
| Relevered beta | 0.73 | 0.85 |
| Adjusted relevered beta | 0.82 | 0.9 |
6018.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 6018.T:
cost_of_equity (7.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.