7902.T
Sonocom Co Ltd
Price:  
836.00 
JPY
Volume:  
500.00
Japan | Electronic Equipment, Instruments & Components
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7902.T WACC - Weighted Average Cost of Capital

The WACC of Sonocom Co Ltd (7902.T) is 7.7%.

The Cost of Equity of Sonocom Co Ltd (7902.T) is 12.25%.
The Cost of Debt of Sonocom Co Ltd (7902.T) is 5.00%.

Range Selected
Cost of equity 10.30% - 14.20% 12.25%
Tax rate 34.90% - 36.20% 35.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 8.7% 7.7%
WACC

7902.T WACC calculation

Category Low High
Long-term bond rate 1.4% 1.9%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.45 1.65
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 14.20%
Tax rate 34.90% 36.20%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 8.7%
Selected WACC 7.7%

7902.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 7902.T:

cost_of_equity (12.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.45) + 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.