8125.T WACC - Weighted Average Cost of Capital

The WACC of Wakita & Co Ltd (8125.T) is 6.5%.

The Cost of Equity of Wakita & Co Ltd (8125.T) is 7.45%.

The Cost of Debt of Wakita & Co Ltd (8125.T) is 4.25%.

	Range	Selected
Cost of equity	6.00% - 8.90%	7.45%
Tax rate	38.80% - 39.10%	38.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.4% - 7.7%	6.5%

WACC

8125.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.76	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.90%

Tax rate	38.80%	39.10%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.00%	4.50%

After-tax WACC	5.4%	7.7%


Selected WACC	6.5%

8125.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 8125.T:

cost_of_equity (7.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.76) + 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.