4409.T WACC - Weighted Average Cost of Capital
The WACC of Toho Chemical Industry Co Ltd (4409.T) is 4.7%.
| Range | Selected | |
| Cost of equity | 6.2% - 9.2% | 7.7% |
| Tax rate | 22.5% - 24.3% | 23.4% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.2% - 5.3% | 4.7% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.79 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 9.2% |
| Tax rate | 22.5% | 24.3% |
| Debt/Equity ratio | 1.97 | 1.97 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.2% | 5.3% |
| Selected WACC | 4.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4409.T | Toho Chemical Industry Co Ltd | 1.97 | 0.41 | 0.16 |
| 4027.T | Tayca Corp | 0.31 | 0.99 | 0.8 |
| 4082.T | Daiichi Kigenso Kagaku Kogyo Co Ltd | 1.58 | 0.81 | 0.37 |
| 4100.T | Toda Kogyo Corp | 4.69 | 0.94 | 0.21 |
| 4119.T | Nippon Pigment Co Ltd | 0.98 | 0.66 | 0.38 |
| 4364.T | Manac Incorporated | 0.05 | 0.3 | 0.29 |
| 4367.T | Koei Chemical Co Ltd | 0.93 | 0.43 | 0.25 |
| 4463.T | Nicca Chemical Co Ltd | 0.47 | 0.09 | 0.07 |
| 4977.T | Nitta Gelatin Inc | 0.68 | 1.03 | 0.68 |
| 7940.T | Wavelock Holdings Co Ltd | 0.85 | 0.61 | 0.37 |
| Low | High | |
| Unlevered beta | 0.28 | 0.37 |
| Relevered beta | 0.69 | 0.93 |
| Adjusted relevered beta | 0.79 | 0.95 |
4409.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 4409.T:
cost_of_equity (7.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.