8508.T WACC - Weighted Average Cost of Capital

The WACC of J Trust Co Ltd (8508.T) is 21.0%.

The Cost of Equity of J Trust Co Ltd (8508.T) is 8.30%.

The Cost of Debt of J Trust Co Ltd (8508.T) is 43.85%.

	Range	Selected
Cost of equity	6.80% - 9.80%	8.30%
Tax rate	27.70% - 30.60%	29.15%
Cost of debt	21.40% - 66.30%	43.85%
WACC	11.7% - 30.3%	21.0%

WACC

8508.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.89	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.80%

Tax rate	27.70%	30.60%
Debt/Equity ratio	1.31	1.31
Cost of debt	21.40%	66.30%

After-tax WACC	11.7%	30.3%


Selected WACC	21.0%

8508.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 8508.T:

cost_of_equity (8.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.