4246.T
DaikyoNishikawa Corp
Price:  
663 
JPY
Volume:  
122,600
Japan | Auto Components

4246.T WACC - Weighted Average Cost of Capital

The WACC of DaikyoNishikawa Corp (4246.T) is 7.0%.

The Cost of Equity of DaikyoNishikawa Corp (4246.T) is 9.2%.
The Cost of Debt of DaikyoNishikawa Corp (4246.T) is 4.25%.

RangeSelected
Cost of equity7.9% - 10.5%9.2%
Tax rate27.7% - 30.6%29.15%
Cost of debt4.0% - 4.5%4.25%
WACC6.1% - 7.9%7.0%
WACC

4246.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta1.061.14
Additional risk adjustments0.0%0.5%
Cost of equity7.9%10.5%
Tax rate27.7%30.6%
Debt/Equity ratio
0.550.55
Cost of debt4.0%4.5%
After-tax WACC6.1%7.9%
Selected WACC7.0%

4246.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 4246.T:

cost_of_equity (9.20%) = 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.