6914.T WACC - Weighted Average Cost of Capital

The WACC of Optex Group Co Ltd (6914.T) is 7.7%.

The Cost of Equity of Optex Group Co Ltd (6914.T) is 8.45%.

The Cost of Debt of Optex Group Co Ltd (6914.T) is 4.25%.

	Range	Selected
Cost of equity	7.20% - 9.70%	8.45%
Tax rate	26.70% - 28.70%	27.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.5% - 8.8%	7.7%

WACC

6914.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.94	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.70%

Tax rate	26.70%	28.70%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.00%	4.50%

After-tax WACC	6.5%	8.8%


Selected WACC	7.7%

6914.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 6914.T:

cost_of_equity (8.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.