8783.T WACC - Weighted Average Cost of Capital

The WACC of GFA Co Ltd (8783.T) is 6.5%.

The Cost of Equity of GFA Co Ltd (8783.T) is 6.35%.

The Cost of Debt of GFA Co Ltd (8783.T) is 7.15%.

	Range	Selected
Cost of equity	5.20% - 7.50%	6.35%
Tax rate	0.20% - 0.80%	0.50%
Cost of debt	7.00% - 7.30%	7.15%
WACC	5.7% - 7.4%	6.5%

WACC

8783.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.37	0.5

Additional risk adjustments	1.5%	2.0%
Cost of equity	5.20%	7.50%

Tax rate	0.20%	0.80%
Debt/Equity ratio	0.36	0.36
Cost of debt	7.00%	7.30%

After-tax WACC	5.7%	7.4%


Selected WACC	6.5%

8783.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 8783.T:

cost_of_equity (6.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.37) + risk_adjustments (1.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.