6986.T
Futaba Corp
Price:  
591 
JPY
Volume:  
363,200
Japan | Electrical Equipment

6986.T WACC - Weighted Average Cost of Capital

The WACC of Futaba Corp (6986.T) is 5.9%.

The Cost of Equity of Futaba Corp (6986.T) is 5.95%.
The Cost of Debt of Futaba Corp (6986.T) is 5.1%.

RangeSelected
Cost of equity5.0% - 6.9%5.95%
Tax rate27.7% - 30.6%29.15%
Cost of debt4.0% - 6.2%5.1%
WACC5.0% - 6.8%5.9%
WACC

6986.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.60.63
Additional risk adjustments0.0%0.5%
Cost of equity5.0%6.9%
Tax rate27.7%30.6%
Debt/Equity ratio
0.030.03
Cost of debt4.0%6.2%
After-tax WACC5.0%6.8%
Selected WACC5.9%

6986.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 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.