8424.T WACC - Weighted Average Cost of Capital

The WACC of Fuyo General Lease Co Ltd (8424.T) is 6.5%.

The Cost of Equity of Fuyo General Lease Co Ltd (8424.T) is 10.60%.

The Cost of Debt of Fuyo General Lease Co Ltd (8424.T) is 8.60%.

	Range	Selected
Cost of equity	6.60% - 14.60%	10.60%
Tax rate	30.20% - 30.80%	30.50%
Cost of debt	4.00% - 13.20%	8.60%
WACC	3.3% - 9.8%	6.5%

WACC

8424.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.85	1.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	14.60%

Tax rate	30.20%	30.80%
Debt/Equity ratio	7.22	7.22
Cost of debt	4.00%	13.20%

After-tax WACC	3.3%	9.8%


Selected WACC	6.5%

8424.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 8424.T:

cost_of_equity (10.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.85) + 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.