6844.T WACC - Weighted Average Cost of Capital
The WACC of Shindengen Electric Manufacturing Co Ltd (6844.T) is 5.9%.
| Range | Selected | |
| Cost of equity | 7.4% - 15.1% | 11.25% |
| Tax rate | 27.7% - 30.6% | 29.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.5% - 7.3% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.98 | 1.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 15.1% |
| Tax rate | 27.7% | 30.6% |
| Debt/Equity ratio | 1.88 | 1.88 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.5% | 7.3% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6844.T | Shindengen Electric Manufacturing Co Ltd | 1.88 | 0.97 | 0.42 |
| 033160.KQ | MK Electron | 6.27 | 1.29 | 0.24 |
| 046890.KQ | Seoul Semiconductor Co Ltd | 0.55 | 0.58 | 0.42 |
| 3445.T | RS Technologies Co Ltd | 0.16 | 1.25 | 1.13 |
| 6616.T | Torex Semiconductor Ltd | 0.9 | 1.52 | 0.94 |
| 6832.T | Aoi Electronics Co Ltd | 0.09 | 1.08 | 1.02 |
| 6941.T | Yamaichi Electronics Co Ltd | 0.12 | 1.07 | 0.99 |
| 6966.T | Mitsui High-tec Inc | 0.53 | 1.3 | 0.95 |
| 6967.T | Shinko Electric Industries Co Ltd | 0.04 | 0.29 | 0.28 |
| 7836.T | AVIX Inc | 0.17 | 0.46 | 0.41 |
| Low | High | |
| Unlevered beta | 0.42 | 0.94 |
| Relevered beta | 0.97 | 2.16 |
| Adjusted relevered beta | 0.98 | 1.78 |
6844.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 6844.T:
cost_of_equity (11.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.98) + 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.