The WACC of Kasai Kogyo Co Ltd (7256.T) is 6.8%.
| Range | Selected | |
| Cost of equity | 25.00% - 41.70% | 33.35% |
| Tax rate | 11.60% - 40.10% | 25.85% |
| Cost of debt | 4.00% - 13.20% | 8.60% |
| WACC | 4.4% - 9.3% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 3.84 | 5.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 25.00% | 41.70% |
| Tax rate | 11.60% | 40.10% |
| Debt/Equity ratio | 23.51 | 23.51 |
| Cost of debt | 4.00% | 13.20% |
| After-tax WACC | 4.4% | 9.3% |
| Selected WACC | 6.8% | |
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 7256.T:
cost_of_equity (33.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (3.84) + 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.