6905.T WACC - Weighted Average Cost of Capital
The WACC of Cosel Co Ltd (6905.T) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.5% | 7.35% |
| Tax rate | 37.1% - 45.6% | 41.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.1% - 8.5% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.78 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.5% |
| Tax rate | 37.1% | 45.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.1% | 8.5% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6905.T | Cosel Co Ltd | 0.01 | 0.71 | 0.71 |
| 5302.T | Nippon Carbon Co Ltd | 0.18 | 0.66 | 0.59 |
| 5304.T | SEC Carbon Ltd | 0 | 0.96 | 0.96 |
| 5310.T | Toyo Tanso Co Ltd | 0.01 | 1.11 | 1.1 |
| 5807.T | Totoku Electric Co Ltd | 0.06 | 1.14 | 1.1 |
| 5821.T | Hirakawa Hewtech Corp | 0.12 | 0.95 | 0.89 |
| 6643.T | Togami Electric Mfg Co Ltd | 0.02 | 0.58 | 0.57 |
| 6748.T | Seiwa Electric Mfg. Co Ltd | 0.77 | 0.65 | 0.44 |
| 6882.T | Sansha Electric Manufacturing Co Ltd | 0.28 | 0.78 | 0.67 |
| 6901.T | Sawafuji Electric Co Ltd | 1.23 | 0.73 | 0.42 |
| Low | High | |
| Unlevered beta | 0.64 | 0.78 |
| Relevered beta | 0.67 | 0.79 |
| Adjusted relevered beta | 0.78 | 0.86 |
6905.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 6905.T:
cost_of_equity (7.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.78) + 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.