8025.T WACC - Weighted Average Cost of Capital

The WACC of Tsukamoto Corporation Co Ltd (8025.T) is 5.9%.

The Cost of Equity of Tsukamoto Corporation Co Ltd (8025.T) is 8.50%.

The Cost of Debt of Tsukamoto Corporation Co Ltd (8025.T) is 5.50%.

	Range	Selected
Cost of equity	6.40% - 10.60%	8.50%
Tax rate	23.80% - 27.30%	25.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.4% - 7.3%	5.9%

WACC

8025.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.82	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	10.60%

Tax rate	23.80%	27.30%
Debt/Equity ratio	1.48	1.48
Cost of debt	4.00%	7.00%

After-tax WACC	4.4%	7.3%


Selected WACC	5.9%

8025.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 8025.T:

cost_of_equity (8.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.