7272.T WACC - Weighted Average Cost of Capital

The WACC of Yamaha Motor Co Ltd (7272.T) is 6.6%.

The Cost of Equity of Yamaha Motor Co Ltd (7272.T) is 9.50%.

The Cost of Debt of Yamaha Motor Co Ltd (7272.T) is 4.25%.

	Range	Selected
Cost of equity	8.20% - 10.80%	9.50%
Tax rate	25.20% - 28.90%	27.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.9% - 7.4%	6.6%

WACC

7272.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.11	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.80%

Tax rate	25.20%	28.90%
Debt/Equity ratio	0.81	0.81
Cost of debt	4.00%	4.50%

After-tax WACC	5.9%	7.4%


Selected WACC	6.6%

7272.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 7272.T:

cost_of_equity (9.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.