6779.T WACC - Weighted Average Cost of Capital

The WACC of Nihon Dempa Kogyo Co Ltd (6779.T) is 6.8%.

The Cost of Equity of Nihon Dempa Kogyo Co Ltd (6779.T) is 11.60%.

The Cost of Debt of Nihon Dempa Kogyo Co Ltd (6779.T) is 4.25%.

	Range	Selected
Cost of equity	9.70% - 13.50%	11.60%
Tax rate	14.60% - 19.70%	17.15%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.0% - 7.6%	6.8%

WACC

6779.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.36	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	13.50%

Tax rate	14.60%	19.70%
Debt/Equity ratio	1.45	1.45
Cost of debt	4.00%	4.50%

After-tax WACC	6.0%	7.6%


Selected WACC	6.8%

6779.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 6779.T:

cost_of_equity (11.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.36) + 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.