The WACC of Toyo Engineering Corp (6330.T) is 6.1%.
Range | Selected | |
Cost of equity | 8.5% - 11.3% | 9.9% |
Tax rate | 27.7% - 30.6% | 29.15% |
Cost of debt | 4.0% - 5.0% | 4.5% |
WACC | 5.4% - 6.9% | 6.1% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.15 | 1.25 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.5% | 11.3% |
Tax rate | 27.7% | 30.6% |
Debt/Equity ratio | 1.26 | 1.26 |
Cost of debt | 4.0% | 5.0% |
After-tax WACC | 5.4% | 6.9% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6330.T | Toyo Engineering Corp | 1.26 | 1.31 | 0.7 |
1815.T | Tekken Corp | 1.28 | 0.71 | 0.37 |
1833.T | Okumura Corp | 0.26 | 0.68 | 0.57 |
1885.T | Toa Corp (Tokyo) | 0.35 | 0.74 | 0.6 |
1899.T | Fukuda Corp | 0.04 | 1 | 0.97 |
1934.T | Yurtec Corp | 0.06 | 0.72 | 0.69 |
1946.T | Toenec Corp | 0.76 | 0.82 | 0.54 |
1950.T | Nippon Densetsu Kogyo Co Ltd | 0.03 | 0.94 | 0.92 |
1961.T | Sanki Engineering Co Ltd | 0.03 | 0.81 | 0.79 |
1979.T | Taikisha Ltd | 0.08 | 0.82 | 0.77 |
Low | High | |
Unlevered beta | 0.66 | 0.73 |
Relevered beta | 1.22 | 1.37 |
Adjusted relevered beta | 1.15 | 1.25 |
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 6330.T:
cost_of_equity (9.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.15) + 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.