4119.T WACC - Weighted Average Cost of Capital

The WACC of Nippon Pigment Co Ltd (4119.T) is 5.7%.

The Cost of Equity of Nippon Pigment Co Ltd (4119.T) is 9.15%.

The Cost of Debt of Nippon Pigment Co Ltd (4119.T) is 4.25%.

	Range	Selected
Cost of equity	7.10% - 11.20%	9.15%
Tax rate	41.70% - 43.90%	42.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.7% - 6.8%	5.7%

WACC

4119.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.92	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	11.20%

Tax rate	41.70%	43.90%
Debt/Equity ratio	1.02	1.02
Cost of debt	4.00%	4.50%

After-tax WACC	4.7%	6.8%


Selected WACC	5.7%

4119.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 4119.T:

cost_of_equity (9.15%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.92) + 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.