8031.T WACC - Weighted Average Cost of Capital

The WACC of Mitsui & Co Ltd (8031.T) is 6.8%.

The Cost of Equity of Mitsui & Co Ltd (8031.T) is 8.15%.

The Cost of Debt of Mitsui & Co Ltd (8031.T) is 4.50%.

	Range	Selected
Cost of equity	6.90% - 9.40%	8.15%
Tax rate	18.20% - 19.10%	18.65%
Cost of debt	4.00% - 5.00%	4.50%
WACC	5.8% - 7.8%	6.8%

WACC

8031.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.9	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.40%

Tax rate	18.20%	19.10%
Debt/Equity ratio	0.41	0.41
Cost of debt	4.00%	5.00%

After-tax WACC	5.8%	7.8%


Selected WACC	6.8%

8031.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 8031.T:

cost_of_equity (8.15%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.9) + 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.