8150.T WACC - Weighted Average Cost of Capital

The WACC of Sanshin Electronics Co Ltd (8150.T) is 5.8%.

The Cost of Equity of Sanshin Electronics Co Ltd (8150.T) is 13.65%.

The Cost of Debt of Sanshin Electronics Co Ltd (8150.T) is 4.25%.

	Range	Selected
Cost of equity	11.20% - 16.10%	13.65%
Tax rate	26.30% - 28.10%	27.20%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.1% - 6.5%	5.8%

WACC

8150.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.6	1.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	16.10%

Tax rate	26.30%	28.10%
Debt/Equity ratio	2.9	2.9
Cost of debt	4.00%	4.50%

After-tax WACC	5.1%	6.5%


Selected WACC	5.8%

8150.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 8150.T:

cost_of_equity (13.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.6) + 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.