7270.T
Subaru Corp
Price:  
2,510 
JPY
Volume:  
1,983,200
Japan | Automobiles

7270.T WACC - Weighted Average Cost of Capital

The WACC of Subaru Corp (7270.T) is 8.2%.

The Cost of Equity of Subaru Corp (7270.T) is 9.35%.
The Cost of Debt of Subaru Corp (7270.T) is 4.25%.

RangeSelected
Cost of equity7.9% - 10.8%9.35%
Tax rate28.2% - 29.9%29.05%
Cost of debt4.0% - 4.5%4.25%
WACC7.0% - 9.4%8.2%
WACC

7270.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta1.071.18
Additional risk adjustments0.0%0.5%
Cost of equity7.9%10.8%
Tax rate28.2%29.9%
Debt/Equity ratio
0.220.22
Cost of debt4.0%4.5%
After-tax WACC7.0%9.4%
Selected WACC8.2%

7270.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 7270.T:

cost_of_equity (9.35%) = 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.