7674.T WACC - Weighted Average Cost of Capital

The WACC of Natty Swanky Co Ltd (7674.T) is 6.3%.

The Cost of Equity of Natty Swanky Co Ltd (7674.T) is 6.45%.

The Cost of Debt of Natty Swanky Co Ltd (7674.T) is 6.95%.

	Range	Selected
Cost of equity	5.10% - 7.80%	6.45%
Tax rate	28.30% - 31.10%	29.70%
Cost of debt	4.00% - 9.90%	6.95%
WACC	4.9% - 7.7%	6.3%

WACC

7674.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.36	0.54

Additional risk adjustments	1.5%	2.0%
Cost of equity	5.10%	7.80%

Tax rate	28.30%	31.10%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	9.90%

After-tax WACC	4.9%	7.7%


Selected WACC	6.3%

7674.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 7674.T:

cost_of_equity (6.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.36) + risk_adjustments (1.75%)

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