6855.T WACC - Weighted Average Cost of Capital
The WACC of Japan Electronic Materials Corp (6855.T) is 9.4%.
| Range | Selected | |
| Cost of equity | 8.9% - 12.7% | 10.8% |
| Tax rate | 25.0% - 25.3% | 25.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.8% - 11.0% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.22 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 12.7% |
| Tax rate | 25.0% | 25.3% |
| Debt/Equity ratio | 0.22 | 0.22 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.8% | 11.0% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6855.T | Japan Electronic Materials Corp | 0.22 | 1.64 | 1.41 |
| 5217.T | Techno Quartz Inc | 0.19 | 0.43 | 0.38 |
| 6266.T | Tazmo Co Ltd | 0.32 | 1.58 | 1.28 |
| 6298.T | Y.A.C. Holdings Co., Ltd. | 1.12 | 1.65 | 0.9 |
| 6323.T | Rorze Corp | 0.11 | 2.06 | 1.91 |
| 6336.T | Ishii Hyoki Co Ltd | 0.4 | 0.79 | 0.61 |
| 6387.T | Samco Inc | 0.05 | 1.51 | 1.46 |
| 6677.T | SK-Electronics Co Ltd | 0.04 | 0.97 | 0.95 |
| 6871.T | Micronics Japan Co Ltd | 0.01 | 1.47 | 1.46 |
| 7729.T | Tokyo Seimitsu Co Ltd | 0.06 | 1.77 | 1.7 |
| Low | High | |
| Unlevered beta | 1.15 | 1.43 |
| Relevered beta | 1.33 | 1.66 |
| Adjusted relevered beta | 1.22 | 1.44 |
6855.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 6855.T:
cost_of_equity (10.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.22) + 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.