6977.T
Japan Resistor Mfg. Co Ltd
Price:  
854 
JPY
Volume:  
400
Japan | Electronic Equipment, Instruments & Components

6977.T WACC - Weighted Average Cost of Capital

The WACC of Japan Resistor Mfg. Co Ltd (6977.T) is 4.6%.

The Cost of Equity of Japan Resistor Mfg. Co Ltd (6977.T) is 9.25%.
The Cost of Debt of Japan Resistor Mfg. Co Ltd (6977.T) is 5.5%.

RangeSelected
Cost of equity6.5% - 12.0%9.25%
Tax rate37.5% - 40.4%38.95%
Cost of debt4.0% - 7.0%5.5%
WACC3.4% - 5.9%4.6%
WACC

6977.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.841.34
Additional risk adjustments0.0%0.5%
Cost of equity6.5%12.0%
Tax rate37.5%40.4%
Debt/Equity ratio
3.53.5
Cost of debt4.0%7.0%
After-tax WACC3.4%5.9%
Selected WACC4.6%

6977.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 6977.T:

cost_of_equity (9.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.