The WACC of Fujitsu General Ltd (6755.T) is 5.8%.
Range | Selected | |
Cost of equity | 5.0% - 7.0% | 6% |
Tax rate | 40.2% - 49.9% | 45.05% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.9% - 6.8% | 5.8% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.59 | 0.64 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 7.0% |
Tax rate | 40.2% | 49.9% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.9% | 6.8% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6755.T | Fujitsu General Ltd | 0.05 | 0.5 | 0.49 |
5947.T | Rinnai Corp | 1.19 | 0.63 | 0.39 |
5962.T | Asaka Industrial Co Ltd | 0.59 | 0.24 | 0.18 |
5966.T | Kyoto Tool Co Ltd | 0.14 | 0.46 | 0.43 |
5967.T | Tone Co Ltd | 0.18 | 0.39 | 0.36 |
6445.T | Janome Sewing Machine Co Ltd | 0.08 | 0.43 | 0.41 |
6612.T | Balmuda Inc | 0.06 | 0.39 | 0.38 |
6897.T | Twinbird Corp | 0.46 | 0.4 | 0.32 |
7955.T | Cleanup Corp | 0.29 | 0.6 | 0.52 |
7965.T | Zojirushi Corp | 0.03 | 0.72 | 0.71 |
Low | High | |
Unlevered beta | 0.38 | 0.42 |
Relevered beta | 0.39 | 0.46 |
Adjusted relevered beta | 0.59 | 0.64 |
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 6755.T:
cost_of_equity (6.00%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.