6976.T WACC - Weighted Average Cost of Capital

The WACC of Taiyo Yuden Co Ltd (6976.T) is 8.8%.

The Cost of Equity of Taiyo Yuden Co Ltd (6976.T) is 10.90%.

The Cost of Debt of Taiyo Yuden Co Ltd (6976.T) is 4.25%.

	Range	Selected
Cost of equity	8.70% - 13.10%	10.90%
Tax rate	25.00% - 29.80%	27.40%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.2% - 10.5%	8.8%

WACC

6976.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.19	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	13.10%

Tax rate	25.00%	29.80%
Debt/Equity ratio	0.36	0.36
Cost of debt	4.00%	4.50%

After-tax WACC	7.2%	10.5%


Selected WACC	8.8%

6976.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 6976.T:

cost_of_equity (10.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.19) + 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.