6838.T
Tamagawa Holdings Co Ltd
Price:  
750 
JPY
Volume:  
67,600
Japan | Communications Equipment

6838.T WACC - Weighted Average Cost of Capital

The WACC of Tamagawa Holdings Co Ltd (6838.T) is 6.1%.

The Cost of Equity of Tamagawa Holdings Co Ltd (6838.T) is 7.9%.
The Cost of Debt of Tamagawa Holdings Co Ltd (6838.T) is 5.3%.

RangeSelected
Cost of equity6.0% - 9.8%7.9%
Tax rate20.7% - 33.8%27.25%
Cost of debt4.0% - 6.6%5.3%
WACC4.7% - 7.4%6.1%
WACC

6838.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.751.03
Additional risk adjustments0.0%0.5%
Cost of equity6.0%9.8%
Tax rate20.7%33.8%
Debt/Equity ratio
0.790.79
Cost of debt4.0%6.6%
After-tax WACC4.7%7.4%
Selected WACC6.1%

6838.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 6838.T:

cost_of_equity (7.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.75) + 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.