As of today (2026-07-07), Rheon Automatic Machinery Co's weighted average cost of capital is 5.54%%. Rheon Automatic Machinery Co's ROIC % is 10.13% (calculated using TTM income statement data).
Rheon Automatic Machinery Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Rheon Automatic Machinery Co (TSE:6272) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Rheon Automatic Machinery Co's weighted average cost of capital is 5.54%%. Rheon Automatic Machinery Co's ROIC % is 10.13% (calculated using TTM income statement data).
Rheon Automatic Machinery Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Rheon Automatic Machinery Co WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Industrial Machinery subindustry, Rheon Automatic Machinery Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rheon Automatic Machinery Co WACC % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Rheon Automatic Machinery Co's WACC % distribution charts can be found below:
* The bar in red indicates where Rheon Automatic Machinery Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Rheon Automatic Machinery Co's market capitalization (E) is 円41370.105 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Rheon Automatic Machinery Co's latest one-year quarterly average Book Value of Debt (D) is 円1568.1774 Mil.
a) weight of equity = E / (E + D) = 41370.105 / (41370.105 + 1568.1774) = 0.9635
b) weight of debt = D / (E + D) = 1568.1774 / (41370.105 + 1568.1774) = 0.0365
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 2.65%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Rheon Automatic Machinery Co's beta is 0.5104.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 2.65% + 0.5104 * 6% = 5.7124%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Rheon Automatic Machinery Co's interest expense (positive number) was 円23.174 Mil. Its total Book Value of Debt (D) is 円1568.1774 Mil.
Cost of Debt = 23.174 / 1568.1774 = 1.4778%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 1690.414 / 5588.761 = 30.25%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Rheon Automatic Machinery Co (TSE:6272) has a WACC % of 5.54% as of Jul. 07, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Rheon Automatic Machinery Co and its competitors. This is near median its historical median of 6.11. Over the past decade, Rheon Automatic Machinery Co's WACC % has ranged from 4.26 to 7.69. According to the industry distribution chart, Rheon Automatic Machinery Co ranks #741 out of 3082 companies in the Industrial Products industry, placing it in the top 24%.
Is Rheon Automatic Machinery Co's WACC % too high?
Rheon Automatic Machinery Co's current WACC % of 5.54% is near median its 10-year median of 6.11. Over the past 10 years, this metric has ranged from a low of 4.26 to a high of 7.69. The Industrial Products industry median WACC % is 9.67. Rheon Automatic Machinery Co's value of 5.54% is 42.7% below this industry median. Based on the distribution chart, Rheon Automatic Machinery Co ranks #741 out of 3082 companies in the Industrial Products industry, which is in the top quartile — a strong position relative to peers. Overall, Rheon Automatic Machinery Co has a GF Score™ of 85/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Rheon Automatic Machinery Co's WACC % compare to GEV and ETN?
According to the Industrial Products industry distribution chart, Rheon Automatic Machinery Co ranks #741 out of 3082 companies for WACC %. This places Rheon Automatic Machinery Co in the top 24% of its industry — outperforming the majority of peers. The industry median WACC % is 9.67. Rheon Automatic Machinery Co's value of 5.54% is 42.7% below this benchmark. Historically, Rheon Automatic Machinery Co's own WACC % has ranged from 4.26 to 7.69 over the past decade. While the company's 10-year median is 6.11 vs. the industry median of 9.67, Rheon Automatic Machinery Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Industrial Products company?
The median WACC % among Industrial Products companies is 9.67, based on 3,082 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rheon Automatic Machinery Co's current WACC % of 5.54% is 42.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Rheon Automatic Machinery Co and its competitors. For the Industrial Products industry, the median WACC % is 9.67 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rheon Automatic Machinery Co's current WACC % is 5.54%, which is near median its own 10-year median of 6.11. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rheon Automatic Machinery Co stock overvalued right now?
Based on GuruFocus' analysis, Rheon Automatic Machinery Co (TSE:6272) is currently considered Fairly Valued. The stock's GF Value™ is 円1,569.93, compared to a current price of 円1,532.00 — trading 2.4% below its estimated fair value. The current WACC % is 5.54%, which is near median its 10-year median of 6.11 and 42.7% below the Industrial Products industry median of 9.67. Rheon Automatic Machinery Co's overall GF Score™ is 85/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Rheon Automatic Machinery Co (TSE:6272), the current WACC % is 5.54% as of Jul. 07, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Rheon Automatic Machinery Co (TSE:6272) Overvalued in 2026?
Based on GuruFocus' analysis, Rheon Automatic Machinery Co stock appears to be undervalued.
The current stock price of 円1,532.00 is trading 2.4% below its estimated GF Value™ of 円1,569.93.
GuruFocus considers Rheon Automatic Machinery Co to be Fairly Valued.
Key valuation signals for TSE:6272:
WACC %: 5.54% (near median its 10-year median of 6.11)
GF Value™: 円1,569.93 vs. price of 円1,532.00 (2.4% below fair value)
Industry Position: 42.7% below the Industrial Products median (#741 of 3082)
No single metric tells the full story. See the TSE:6272 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rheon Automatic Machinery Co Ltd is a Japanese company engaged in developing, manufacturing and supplying a wide range of food processing machines, and factory systems. It develops fully automated croissant production line and automatic filled product machine. The entity sells its products in Japan, and also exports it to other countries. It offers products like encrusting machines and bread production line. The encrusting machines produce confectionery, bread and prepared products, whereas the products produced by bread production line are croissant, Danish pastry, puff pastry, loaf bread, and pizza, among other products. The equipment portfolio of the company includes equipment for encrusting, bread production, cornucopia, meat processing, pizza production, robot arm, and others.
85GF Score
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