6743.T WACC - Weighted Average Cost of Capital

The WACC of Daido Signal Co Ltd (6743.T) is 5.6%.

The Cost of Equity of Daido Signal Co Ltd (6743.T) is 7.45%.

The Cost of Debt of Daido Signal Co Ltd (6743.T) is 4.25%.

	Range	Selected
Cost of equity	5.70% - 9.20%	7.45%
Tax rate	32.10% - 33.70%	32.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.5% - 6.7%	5.6%

WACC

6743.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.7	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	9.20%

Tax rate	32.10%	33.70%
Debt/Equity ratio	0.69	0.69
Cost of debt	4.00%	4.50%

After-tax WACC	4.5%	6.7%


Selected WACC	5.6%

6743.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 6743.T:

cost_of_equity (7.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.