3864.T WACC - Weighted Average Cost of Capital
The WACC of Mitsubishi Paper Mills Ltd (3864.T) is 3.6%.
| Range | Selected | |
| Cost of equity | 3.8% - 8.4% | 6.1% |
| Tax rate | 35.4% - 41.3% | 38.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 2.9% - 4.3% | 3.6% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.4 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.8% | 8.4% |
| Tax rate | 35.4% | 41.3% |
| Debt/Equity ratio | 2.5 | 2.5 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 2.9% | 4.3% |
| Selected WACC | 3.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3864.T | Mitsubishi Paper Mills Ltd | 2.5 | 1.29 | 0.51 |
| 002030.KS | Asia Holdings Co Ltd | 1.12 | 0.08 | 0.05 |
| 009200.KS | Moorim Paper Co Ltd | 14.67 | 0.29 | 0.03 |
| 3708.T | Tokushu Tokai Paper Co Ltd | 0.58 | 0.55 | 0.4 |
| 3865.T | Hokuetsu Corp | 0.46 | 0.8 | 0.62 |
| 3877.T | Chuetsu Pulp & Paper Co Ltd | 1.67 | 0.83 | 0.41 |
| 3896.T | Awa Paper & Technological Company Inc | 3.32 | 0.72 | 0.24 |
| 7800.T | Amifa Co Ltd | 0.04 | 0.02 | 0.02 |
| 7905.T | Daiken Corp | 0.38 | -0.32 | -0.26 |
| BALLARPUR.NS | Ballarpur Industries Ltd | 18662.45 | 0.81 | 0 |
| Low | High | |
| Unlevered beta | 0.04 | 0.31 |
| Relevered beta | 0.1 | 0.76 |
| Adjusted relevered beta | 0.4 | 0.84 |
3864.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 3864.T:
cost_of_equity (6.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + 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.