4054.T WACC - Weighted Average Cost of Capital

The WACC of Nihon Jyoho Create Co Ltd (4054.T) is 6.1%.

The Cost of Equity of Nihon Jyoho Create Co Ltd (4054.T) is 9.65%.

The Cost of Debt of Nihon Jyoho Create Co Ltd (4054.T) is 4.25%.

	Range	Selected
Cost of equity	7.90% - 11.40%	9.65%
Tax rate	38.60% - 42.50%	40.55%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.2% - 7.0%	6.1%

WACC

4054.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.06	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.40%

Tax rate	38.60%	42.50%
Debt/Equity ratio	1	1
Cost of debt	4.00%	4.50%

After-tax WACC	5.2%	7.0%


Selected WACC	6.1%

4054.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 4054.T:

cost_of_equity (9.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.