7202.T WACC - Weighted Average Cost of Capital

The WACC of Isuzu Motors Ltd (7202.T) is 7.3%.

The Cost of Equity of Isuzu Motors Ltd (7202.T) is 9.20%.

The Cost of Debt of Isuzu Motors Ltd (7202.T) is 5.50%.

	Range	Selected
Cost of equity	7.90% - 10.50%	9.20%
Tax rate	26.70% - 27.40%	27.05%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 8.5%	7.3%

WACC

7202.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.07	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.50%

Tax rate	26.70%	27.40%
Debt/Equity ratio	0.56	0.56
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	8.5%


Selected WACC	7.3%

7202.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 7202.T:

cost_of_equity (9.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.07) + 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.