The WACC of Futaba Corp (6986.T) is 5.9%.
Range | Selected | |
Cost of equity | 5.0% - 6.9% | 5.95% |
Tax rate | 27.7% - 30.6% | 29.15% |
Cost of debt | 4.0% - 6.2% | 5.1% |
WACC | 5.0% - 6.8% | 5.9% |
Category | Low | High |
Long-term bond rate | 1.4% | 1.9% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.6 | 0.63 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 6.9% |
Tax rate | 27.7% | 30.6% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 4.0% | 6.2% |
After-tax WACC | 5.0% | 6.8% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6986.T | Futaba Corp | 0.03 | 1.04 | 1.03 |
5809.T | Tatsuta Electric Wire and Cable Co Ltd | 0.02 | -0.11 | -0.11 |
6513.T | Origin Co Ltd | 0.36 | 0.46 | 0.37 |
6517.T | Denyo Co Ltd | 0.07 | 0.92 | 0.88 |
6652.T | IDEC Corp | 0.36 | 1.04 | 0.83 |
6748.T | Seiwa Electric Mfg. Co Ltd | 0.76 | 0.65 | 0.43 |
6901.T | Sawafuji Electric Co Ltd | 1.16 | 0.71 | 0.39 |
6924.T | Iwasaki Electric Co Ltd | 0.12 | 0.3 | 0.28 |
6955.T | FDK Corp | 1.23 | 0.79 | 0.43 |
6993.T | Daikokuya Holdings Co Ltd | 0.53 | 1.11 | 0.81 |
Low | High | |
Unlevered beta | 0.41 | 0.58 |
Relevered beta | 0.4 | 0.45 |
Adjusted relevered beta | 0.6 | 0.63 |
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 6986.T:
cost_of_equity (5.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.6) + 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.