1963.T WACC - Weighted Average Cost of Capital

The WACC of JGC Holdings Corp (1963.T) is 6.2%.

The Cost of Equity of JGC Holdings Corp (1963.T) is 6.40%.

The Cost of Debt of JGC Holdings Corp (1963.T) is 5.50%.

	Range	Selected
Cost of equity	5.20% - 7.60%	6.40%
Tax rate	27.70% - 30.60%	29.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 7.3%	6.2%

WACC

1963.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.63	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.60%

Tax rate	27.70%	30.60%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	7.3%


Selected WACC	6.2%

1963.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 1963.T:

cost_of_equity (6.40%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.63) + 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.