6806.T WACC - Weighted Average Cost of Capital
The WACC of Hirose Electric Co Ltd (6806.T) is 8.2%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.6% | 8.25% |
| Tax rate | 28.6% - 29.1% | 28.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.8% - 9.5% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.9 | 1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.6% |
| Tax rate | 28.6% | 29.1% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.8% | 9.5% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6806.T | Hirose Electric Co Ltd | 0.01 | 0.86 | 0.86 |
| 4062.T | Ibiden Co Ltd | 0.48 | 1.68 | 1.25 |
| 4980.T | Dexerials Corp | 0.07 | 1.46 | 1.39 |
| 5214.T | Nippon Electric Glass Co Ltd | 0.37 | 0.59 | 0.46 |
| 5344.T | Maruwa Co Ltd | 0.83 | 1.41 | 0.88 |
| 6807.T | Japan Aviation Electronics Industry Ltd | 0.21 | 1.06 | 0.92 |
| 6908.T | Iriso Electronics Co Ltd | 0.15 | 0.88 | 0.8 |
| 6965.T | Hamamatsu Photonics KK | 0.09 | 0.83 | 0.78 |
| 6976.T | Taiyo Yuden Co Ltd | 0.47 | 1.5 | 1.13 |
| 6996.T | Nichicon Corp | 0.45 | 0.99 | 0.75 |
| Low | High | |
| Unlevered beta | 0.83 | 0.9 |
| Relevered beta | 0.85 | 1 |
| Adjusted relevered beta | 0.9 | 1 |
6806.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 6806.T:
cost_of_equity (8.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.9) + 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.