7615.T WACC - Weighted Average Cost of Capital

The WACC of Kyoto Kimono Yuzen Co Ltd (7615.T) is 6.1%.

The Cost of Equity of Kyoto Kimono Yuzen Co Ltd (7615.T) is 6.85%.

The Cost of Debt of Kyoto Kimono Yuzen Co Ltd (7615.T) is 5.50%.

	Range	Selected
Cost of equity	4.80% - 8.90%	6.85%
Tax rate	3.50% - 5.00%	4.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.3% - 7.8%	6.1%

WACC

7615.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.47	0.84

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.80%	8.90%

Tax rate	3.50%	5.00%
Debt/Equity ratio	0.93	0.93
Cost of debt	4.00%	7.00%

After-tax WACC	4.3%	7.8%


Selected WACC	6.1%

7615.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 7615.T:

cost_of_equity (6.85%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.47) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.