3864.T
Mitsubishi Paper Mills Ltd
Price:  
622 
JPY
Volume:  
112,200
Japan | Paper & Forest Products

3864.T WACC - Weighted Average Cost of Capital

The WACC of Mitsubishi Paper Mills Ltd (3864.T) is 3.6%.

The Cost of Equity of Mitsubishi Paper Mills Ltd (3864.T) is 6.1%.
The Cost of Debt of Mitsubishi Paper Mills Ltd (3864.T) is 4.25%.

RangeSelected
Cost of equity3.8% - 8.4%6.1%
Tax rate35.4% - 41.3%38.35%
Cost of debt4.0% - 4.5%4.25%
WACC2.9% - 4.3%3.6%
WACC

3864.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.40.84
Additional risk adjustments0.0%0.5%
Cost of equity3.8%8.4%
Tax rate35.4%41.3%
Debt/Equity ratio
2.52.5
Cost of debt4.0%4.5%
After-tax WACC2.9%4.3%
Selected WACC3.6%

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.