6373.T
Daido Kogyo Co Ltd
Price:  
1,121.00 
JPY
Volume:  
25,000.00
Japan | Machinery
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6373.T WACC - Weighted Average Cost of Capital

The WACC of Daido Kogyo Co Ltd (6373.T) is 4.9%.

The Cost of Equity of Daido Kogyo Co Ltd (6373.T) is 9.05%.
The Cost of Debt of Daido Kogyo Co Ltd (6373.T) is 4.25%.

Range Selected
Cost of equity 7.60% - 10.50% 9.05%
Tax rate 27.50% - 40.60% 34.05%
Cost of debt 4.00% - 4.50% 4.25%
WACC 4.5% - 5.3% 4.9%
WACC

6373.T WACC calculation

Category Low High
Long-term bond rate 1.4% 1.9%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.01 1.13
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 10.50%
Tax rate 27.50% 40.60%
Debt/Equity ratio 2.01 2.01
Cost of debt 4.00% 4.50%
After-tax WACC 4.5% 5.3%
Selected WACC 4.9%

6373.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 6373.T:

cost_of_equity (9.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.01) + 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.