6776.T
Tensho Electric Industries Co Ltd
Price:  
267 
JPY
Volume:  
9,300
Japan | Chemicals

6776.T WACC - Weighted Average Cost of Capital

The WACC of Tensho Electric Industries Co Ltd (6776.T) is 7.0%.

The Cost of Equity of Tensho Electric Industries Co Ltd (6776.T) is 14%.
The Cost of Debt of Tensho Electric Industries Co Ltd (6776.T) is 4.25%.

RangeSelected
Cost of equity11.9% - 16.1%14%
Tax rate27.6% - 30.3%28.95%
Cost of debt4.0% - 4.5%4.25%
WACC6.1% - 7.8%7.0%
WACC

6776.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta1.711.93
Additional risk adjustments0.0%0.5%
Cost of equity11.9%16.1%
Tax rate27.6%30.3%
Debt/Equity ratio
1.791.79
Cost of debt4.0%4.5%
After-tax WACC6.1%7.8%
Selected WACC7.0%

6776.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 6776.T:

cost_of_equity (14.00%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.71) + 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.