6425.T WACC - Weighted Average Cost of Capital

The WACC of Universal Entertainment Corp (6425.T) is 9.4%.

The Cost of Equity of Universal Entertainment Corp (6425.T) is 8.95%.

The Cost of Debt of Universal Entertainment Corp (6425.T) is 13.65%.

	Range	Selected
Cost of equity	7.50% - 10.40%	8.95%
Tax rate	26.40% - 30.80%	28.60%
Cost of debt	5.90% - 21.40%	13.65%
WACC	5.4% - 13.3%	9.4%

WACC

6425.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	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	10.40%

Tax rate	26.40%	30.80%
Debt/Equity ratio	2.04	2.04
Cost of debt	5.90%	21.40%

After-tax WACC	5.4%	13.3%


Selected WACC	9.4%

6425.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 6425.T:

cost_of_equity (8.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1) + 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.