9036.T WACC - Weighted Average Cost of Capital

The WACC of Tohbu Network Co Ltd (9036.T) is 5.7%.

The Cost of Equity of Tohbu Network Co Ltd (9036.T) is 6.20%.

The Cost of Debt of Tohbu Network Co Ltd (9036.T) is 4.25%.

	Range	Selected
Cost of equity	4.90% - 7.50%	6.20%
Tax rate	33.30% - 35.90%	34.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.6% - 6.8%	5.7%

WACC

9036.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.5	0.64

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.90%	7.50%

Tax rate	33.30%	35.90%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.00%	4.50%

After-tax WACC	4.6%	6.8%


Selected WACC	5.7%

9036.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 9036.T:

cost_of_equity (6.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.5) + risk_adjustments (0.75%)

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