7951.T WACC - Weighted Average Cost of Capital
The WACC of Yamaha Corp (7951.T) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.9% | 7.55% |
| Tax rate | 25.7% - 27.1% | 26.4% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.1% - 8.7% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.79 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.9% |
| Tax rate | 25.7% | 27.1% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.1% | 8.7% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7951.T | Yamaha Corp | 0.04 | 1.03 | 1.01 |
| 2767.T | Fields Corp | 0.11 | 1.25 | 1.16 |
| 6460.T | Sega Sammy Holdings Inc | 0.23 | 0.72 | 0.62 |
| 7309.T | Shimano Inc | 0 | 0.37 | 0.37 |
| 7816.T | Snow Peak Inc | 0.3 | 1.11 | 0.91 |
| 7867.T | Tomy Co Ltd | 0.06 | 0.68 | 0.65 |
| 7906.T | Yonex Co Ltd | 0.05 | 0.84 | 0.81 |
| 7952.T | Kawai Musical Instruments Manufacturing Co Ltd | 0.37 | 0.87 | 0.68 |
| 7990.T | Globeride Inc | 0.57 | 0.66 | 0.46 |
| 8022.T | Mizuno Corp | 0.06 | 1.09 | 1.05 |
| Low | High | |
| Unlevered beta | 0.67 | 0.85 |
| Relevered beta | 0.69 | 0.88 |
| Adjusted relevered beta | 0.79 | 0.92 |
7951.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 7951.T:
cost_of_equity (7.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.