6309.T
Tomoe Engineering Co Ltd
Price:  
1,421 
JPY
Volume:  
28,700
Japan | Trading Companies & Distributors

6309.T WACC - Weighted Average Cost of Capital

The WACC of Tomoe Engineering Co Ltd (6309.T) is 4.8%.

The Cost of Equity of Tomoe Engineering Co Ltd (6309.T) is 6.7%.
The Cost of Debt of Tomoe Engineering Co Ltd (6309.T) is 4.25%.

RangeSelected
Cost of equity5.6% - 7.8%6.7%
Tax rate30.7% - 31.7%31.2%
Cost of debt4.0% - 4.5%4.25%
WACC4.2% - 5.4%4.8%
WACC

6309.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.690.76
Additional risk adjustments0.0%0.5%
Cost of equity5.6%7.8%
Tax rate30.7%31.7%
Debt/Equity ratio
11
Cost of debt4.0%4.5%
After-tax WACC4.2%5.4%
Selected WACC4.8%

6309.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 6309.T:

cost_of_equity (6.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.