8511.T WACC - Weighted Average Cost of Capital

The WACC of Japan Securities Finance Co Ltd (8511.T) is 9.8%.

The Cost of Equity of Japan Securities Finance Co Ltd (8511.T) is 42.10%.

The Cost of Debt of Japan Securities Finance Co Ltd (8511.T) is 12.70%.

	Range	Selected
Cost of equity	9.90% - 74.30%	42.10%
Tax rate	27.60% - 27.70%	27.65%
Cost of debt	4.00% - 21.40%	12.70%
WACC	3.0% - 16.5%	9.8%

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	1.39	10.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	74.30%

Tax rate	27.60%	27.70%
Debt/Equity ratio	56.5	56.5
Cost of debt	4.00%	21.40%

After-tax WACC	3.0%	16.5%


Selected WACC	9.8%

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 (42.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.39) + 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.