6743.T WACC - Weighted Average Cost of Capital
The WACC of Daido Signal Co Ltd (6743.T) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.3% | 7.5% |
| Tax rate | 32.1% - 33.7% | 32.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.5% - 6.7% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.71 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.3% |
| Tax rate | 32.1% | 33.7% |
| Debt/Equity ratio | 0.69 | 0.69 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.5% | 6.7% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6743.T | Daido Signal Co Ltd | 0.69 | 0.54 | 0.37 |
| 6418.T | Japan Cash Machine Co Ltd | 0.39 | 1.21 | 0.96 |
| 6629.T | Techno Horizon Co Ltd | 3.17 | 1.48 | 0.47 |
| 6639.T | Contec Co Ltd | 0.17 | 1.67 | 1.49 |
| 6771.T | Ikegami Tsushinki Co Ltd | 2.17 | 0.78 | 0.32 |
| 6824.T | New Cosmos Electric Co Ltd | 0.15 | 0.31 | 0.28 |
| 6850.T | Chino Corp | 0.12 | 0.98 | 0.91 |
| 6946.T | Nippon Avionics Co Ltd | 0.07 | 1.91 | 1.82 |
| 7213.T | Lecip Holdings Corp | 0.25 | 0.46 | 0.39 |
| 7705.T | GL Sciences Inc | 0.22 | 0.18 | 0.16 |
| Low | High | |
| Unlevered beta | 0.38 | 0.65 |
| Relevered beta | 0.57 | 0.94 |
| Adjusted relevered beta | 0.71 | 0.96 |
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 (7.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.71) + 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.