4208.T WACC - Weighted Average Cost of Capital
The WACC of Ube Industries Ltd (4208.T) is 6.9%.
| Range | Selected | |
| Cost of equity | 8.2% - 11.9% | 10.05% |
| Tax rate | 16.5% - 22.2% | 19.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.9% - 7.9% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.11 | 1.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 11.9% |
| Tax rate | 16.5% | 22.2% |
| Debt/Equity ratio | 0.9 | 0.9 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.9% | 7.9% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4208.T | Ube Industries Ltd | 1.4 | 0.77 | 0.36 |
| 4004.T | Showa Denko KK | 1.9 | 1.28 | 0.5 |
| 4021.T | Nissan Chemical Corp | 0.07 | 0.65 | 0.62 |
| 4099.T | Shikoku Chemicals Corp | 0.36 | 1.23 | 0.95 |
| 4113.T | Taoka Chemical Co Ltd | 0.09 | 0.99 | 0.92 |
| 4182.T | Mitsubishi Gas Chemical Co Inc | 0.46 | 0.92 | 0.67 |
| 4187.T | Osaka Organic Chemical Industry Ltd | 0.06 | 1.31 | 1.24 |
| 4202.T | Daicel Corp | 0.9 | 1.03 | 0.59 |
| 4403.T | NOF Corp | 0.01 | 1 | 0.99 |
| 4461.T | DKS Co Ltd | 0.84 | 1.5 | 0.88 |
| Low | High | |
| Unlevered beta | 0.65 | 0.9 |
| Relevered beta | 1.16 | 1.49 |
| Adjusted relevered beta | 1.11 | 1.33 |
4208.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 4208.T:
cost_of_equity (10.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.