7831.T WACC - Weighted Average Cost of Capital

The WACC of Wellco Holdings Corp (7831.T) is 6.5%.

The Cost of Equity of Wellco Holdings Corp (7831.T) is 7.80%.

The Cost of Debt of Wellco Holdings Corp (7831.T) is 5.50%.

	Range	Selected
Cost of equity	5.60% - 10.00%	7.80%
Tax rate	12.40% - 17.90%	15.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.7% - 8.2%	6.5%

WACC

7831.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.69	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	10.00%

Tax rate	12.40%	17.90%
Debt/Equity ratio	0.72	0.72
Cost of debt	4.00%	7.00%

After-tax WACC	4.7%	8.2%


Selected WACC	6.5%

7831.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 7831.T:

cost_of_equity (7.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.