6113.T WACC - Weighted Average Cost of Capital
The WACC of Amada Co Ltd (6113.T) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.7% | 8.35% |
| Tax rate | 30.8% - 32.0% | 31.4% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 9.4% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.92 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.7% |
| Tax rate | 30.8% | 32.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 9.4% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6113.T | Amada Co Ltd | 0.04 | 1.14 | 1.11 |
| 5333.T | NGK Insulators Ltd | 0.46 | 1.07 | 0.81 |
| 5631.T | Japan Steel Works Ltd | 0.07 | 1.51 | 1.44 |
| 6141.T | DMG Mori Co Ltd | 0.22 | 1.56 | 1.35 |
| 6268.T | Nabtesco Corp | 0.14 | 1.12 | 1.02 |
| 6457.T | Glory Ltd | 0.4 | 0.93 | 0.73 |
| 6465.T | Hoshizaki Corp | 0.01 | 0.87 | 0.87 |
| 6481.T | THK Co Ltd | 0.21 | 0.96 | 0.84 |
| 6508.T | Meidensha Corp | 0.26 | 1.17 | 0.99 |
| 7004.T | Hitachi Zosen Corp | 0.82 | 1 | 0.64 |
| Low | High | |
| Unlevered beta | 0.86 | 1 |
| Relevered beta | 0.88 | 1.03 |
| Adjusted relevered beta | 0.92 | 1.02 |
6113.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 6113.T:
cost_of_equity (8.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.92) + 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.