8746.T WACC - Weighted Average Cost of Capital

The WACC of Daiichi Commodities Co Ltd (8746.T) is 7.5%.

The Cost of Equity of Daiichi Commodities Co Ltd (8746.T) is 10.80%.

The Cost of Debt of Daiichi Commodities Co Ltd (8746.T) is 4.25%.

	Range	Selected
Cost of equity	8.60% - 13.00%	10.80%
Tax rate	0.50% - 0.70%	0.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.3% - 8.7%	7.5%

WACC

8746.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.18	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	13.00%

Tax rate	0.50%	0.70%
Debt/Equity ratio	1	1
Cost of debt	4.00%	4.50%

After-tax WACC	6.3%	8.7%


Selected WACC	7.5%

8746.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 8746.T:

cost_of_equity (10.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.18) + 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.