9042.T WACC - Weighted Average Cost of Capital

The WACC of Hankyu Hanshin Holdings Inc (9042.T) is 4.2%.

The Cost of Equity of Hankyu Hanshin Holdings Inc (9042.T) is 5.50%.

The Cost of Debt of Hankyu Hanshin Holdings Inc (9042.T) is 4.25%.

	Range	Selected
Cost of equity	4.70% - 6.30%	5.50%
Tax rate	25.10% - 32.50%	28.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.8% - 4.6%	4.2%

WACC

9042.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.53	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	6.30%

Tax rate	25.10%	32.50%
Debt/Equity ratio	1.13	1.13
Cost of debt	4.00%	4.50%

After-tax WACC	3.8%	4.6%


Selected WACC	4.2%

9042.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 9042.T:

cost_of_equity (5.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.53) + 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.