6507.T WACC - Weighted Average Cost of Capital

The WACC of Sinfonia Technology Co Ltd (6507.T) is 7.8%.

The Cost of Equity of Sinfonia Technology Co Ltd (6507.T) is 8.40%.

The Cost of Debt of Sinfonia Technology Co Ltd (6507.T) is 4.25%.

	Range	Selected
Cost of equity	6.60% - 10.20%	8.40%
Tax rate	27.40% - 28.20%	27.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.2% - 9.5%	7.8%

WACC

6507.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.84	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	10.20%

Tax rate	27.40%	28.20%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.00%	4.50%

After-tax WACC	6.2%	9.5%


Selected WACC	7.8%

6507.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 6507.T:

cost_of_equity (8.40%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.