8934.T WACC - Weighted Average Cost of Capital

The WACC of Sun Frontier Fudousan Co Ltd (8934.T) is 4.1%.

The Cost of Equity of Sun Frontier Fudousan Co Ltd (8934.T) is 5.20%.

The Cost of Debt of Sun Frontier Fudousan Co Ltd (8934.T) is 4.25%.

	Range	Selected
Cost of equity	4.10% - 6.30%	5.20%
Tax rate	32.70% - 36.10%	34.40%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.5% - 4.8%	4.1%

WACC

8934.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.44	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.10%	6.30%

Tax rate	32.70%	36.10%
Debt/Equity ratio	0.84	0.84
Cost of debt	4.00%	4.50%

After-tax WACC	3.5%	4.8%


Selected WACC	4.1%

8934.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 8934.T:

cost_of_equity (5.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.44) + 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.