6866.T WACC - Weighted Average Cost of Capital
The WACC of Hioki EE Corp (6866.T) is 7.5%.
| Range | Selected | |
| Cost of equity | 9.4% - 13.9% | 11.65% |
| Tax rate | 23.3% - 24.0% | 23.65% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.3% - 8.7% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.31 | 1.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 13.9% |
| Tax rate | 23.3% | 24.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.3% | 8.7% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6866.T | Hioki EE Corp | 1.15 | 0.77 | 0.41 |
| 6418.T | Japan Cash Machine Co Ltd | 0.38 | 1.06 | 0.82 |
| 6629.T | Techno Horizon Co Ltd | 3.56 | 1.45 | 0.39 |
| 6639.T | Contec Co Ltd | 0.17 | 1.67 | 1.47 |
| 6777.T | Santec Corp | 0.05 | 1.6 | 1.54 |
| 6824.T | New Cosmos Electric Co Ltd | 0.2 | 0.25 | 0.21 |
| 6859.T | Espec Corp | 0.09 | 1.19 | 1.11 |
| 6914.T | Optex Group Co Ltd | 0.17 | 1.2 | 1.06 |
| 6946.T | Nippon Avionics Co Ltd | 0.08 | 1.91 | 1.79 |
| 7705.T | GL Sciences Inc | 0.22 | 0.18 | 0.16 |
| 7734.T | Riken Keiki Co Ltd | 0.02 | 0.85 | 0.84 |
| Low | High | |
| Unlevered beta | 0.82 | 1.06 |
| Relevered beta | 1.46 | 1.91 |
| Adjusted relevered beta | 1.31 | 1.61 |
6866.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 6866.T:
cost_of_equity (11.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.31) + 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.