8511.T WACC - Weighted Average Cost of Capital

The WACC of Japan Securities Finance Co Ltd (8511.T) is 7.1%.

The Cost of Equity of Japan Securities Finance Co Ltd (8511.T) is 67.05%.

The Cost of Debt of Japan Securities Finance Co Ltd (8511.T) is 8.60%.

	Range	Selected
Cost of equity	22.40% - 111.70%	67.05%
Tax rate	27.50% - 27.70%	27.60%
Cost of debt	4.00% - 13.20%	8.60%
WACC	3.2% - 11.1%	7.1%

WACC

8511.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	3.42	15.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.40%	111.70%

Tax rate	27.50%	27.70%
Debt/Equity ratio	65.78	65.78
Cost of debt	4.00%	13.20%

After-tax WACC	3.2%	11.1%


Selected WACC	7.1%

8511.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 8511.T:

cost_of_equity (67.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (3.42) + 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.