6993.T WACC - Weighted Average Cost of Capital

The WACC of Daikokuya Holdings Co Ltd (6993.T) is 7.0%.

The Cost of Equity of Daikokuya Holdings Co Ltd (6993.T) is 11.45%.

The Cost of Debt of Daikokuya Holdings Co Ltd (6993.T) is 5.50%.

	Range	Selected
Cost of equity	8.80% - 14.10%	11.45%
Tax rate	27.70% - 30.60%	29.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.3% - 8.7%	7.0%

WACC

6993.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.21	1.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	14.10%

Tax rate	27.70%	30.60%
Debt/Equity ratio	1.41	1.41
Cost of debt	4.00%	7.00%

After-tax WACC	5.3%	8.7%


Selected WACC	7.0%

6993.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 6993.T:

cost_of_equity (11.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.21) + 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.