7607.T WACC - Weighted Average Cost of Capital
The WACC of Shinwa Co Ltd (7607.T) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.6% | 7.3% |
| Tax rate | 30.7% - 31.4% | 31.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.9% - 8.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.75 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.6% |
| Tax rate | 30.7% | 31.4% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.9% | 8.5% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7607.T | Shinwa Co Ltd | 0.02 | 0.8 | 0.79 |
| 5192.T | Mitsuboshi Belting Ltd | 0.05 | 0.88 | 0.85 |
| 5933.T | Alinco Inc | 1.24 | 0.76 | 0.41 |
| 6118.T | Aida Engineering Ltd | 0.05 | 0.62 | 0.6 |
| 6143.T | Sodick Co Ltd | 0.78 | 0.95 | 0.62 |
| 6258.T | Hirata Corp | 0.58 | 1.67 | 1.2 |
| 6282.T | Oiles Corp | 0.02 | 0.81 | 0.8 |
| 6317.T | Kitagawa Corp | 1.09 | 0.9 | 0.52 |
| 6349.T | Komori Corp | 0.14 | 1.19 | 1.09 |
| 6440.T | Juki Corp | 7.42 | 1.1 | 0.18 |
| Low | High | |
| Unlevered beta | 0.61 | 0.79 |
| Relevered beta | 0.63 | 0.81 |
| Adjusted relevered beta | 0.75 | 0.87 |
7607.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 7607.T:
cost_of_equity (7.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.75) + 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.