4063.T WACC - Weighted Average Cost of Capital
The WACC of Shin-Etsu Chemical Co Ltd (4063.T) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.5% | 7.25% |
| Tax rate | 25.4% - 27.0% | 26.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 8.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.75 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.5% |
| Tax rate | 25.4% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 8.4% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4063.T | Shin-Etsu Chemical Co Ltd | 0 | 1.14 | 1.14 |
| 4043.T | Tokuyama Corp | 0.54 | 0.93 | 0.66 |
| 4114.T | Nippon Shokubai Co Ltd | 0.16 | 0.65 | 0.58 |
| 4185.T | JSR Corp | 0.2 | 0.27 | 0.23 |
| 4203.T | Sumitomo Bakelite Co Ltd | 0.08 | 1.07 | 1.01 |
| 4612.T | Nippon Paint Holdings Co Ltd | 0.29 | 0.85 | 0.69 |
| 4613.T | Kansai Paint Co Ltd | 0.6 | 0.43 | 0.3 |
| 4631.T | DIC Corp | 1.71 | 0.61 | 0.27 |
| 4634.T | Toyo Ink SC Holdings Co Ltd | 0.53 | 1.25 | 0.9 |
| 6988.T | Nitto Denko Corp | 0 | 1.1 | 1.1 |
| Low | High | |
| Unlevered beta | 0.63 | 0.78 |
| Relevered beta | 0.63 | 0.78 |
| Adjusted relevered beta | 0.75 | 0.85 |
4063.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 4063.T:
cost_of_equity (7.25%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.75) + 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.