8078.T WACC - Weighted Average Cost of Capital

The WACC of Hanwa Co Ltd (8078.T) is 6.1%.

The Cost of Equity of Hanwa Co Ltd (8078.T) is 11.45%.

The Cost of Debt of Hanwa Co Ltd (8078.T) is 4.25%.

	Range	Selected
Cost of equity	9.90% - 13.00%	11.45%
Tax rate	29.60% - 30.00%	29.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.4% - 6.8%	6.1%

WACC

8078.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.39	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	13.00%

Tax rate	29.60%	30.00%
Debt/Equity ratio	1.7	1.7
Cost of debt	4.00%	4.50%

After-tax WACC	5.4%	6.8%


Selected WACC	6.1%

8078.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 8078.T:

cost_of_equity (11.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.39) + 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.