4507.T WACC - Weighted Average Cost of Capital
The WACC of Shionogi & Co Ltd (4507.T) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.2% | 6.15% |
| Tax rate | 16.0% - 17.4% | 16.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.1% - 7.1% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.61 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.2% |
| Tax rate | 16.0% | 17.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.1% | 7.1% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4507.T | Shionogi & Co Ltd | 0.01 | 0.41 | 0.41 |
| 4506.T | Sumitomo Dainippon Pharma Co Ltd | 0.86 | 1.28 | 0.74 |
| 4516.T | Nippon Shinyaku Co Ltd | 0.01 | 0.58 | 0.58 |
| 4523.T | Eisai Co Ltd | 0.16 | 0.92 | 0.81 |
| 4528.T | Ono Pharmaceutical Co Ltd | 0.19 | 0.29 | 0.25 |
| 4530.T | Hisamitsu Pharmaceutical Co Inc | 0.01 | 0.14 | 0.13 |
| 4536.T | Santen Pharmaceutical Co Ltd | 0.1 | 0.44 | 0.41 |
| 4540.T | Tsumura & Co | 0.26 | 0.56 | 0.46 |
| 4552.T | JCR Pharmaceuticals Co Ltd | 0.56 | 0.9 | 0.61 |
| 4581.T | Taisho Pharmaceutical Holdings Co Ltd | 0 | -0.18 | -0.18 |
| Low | High | |
| Unlevered beta | 0.41 | 0.5 |
| Relevered beta | 0.42 | 0.51 |
| Adjusted relevered beta | 0.61 | 0.67 |
4507.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 4507.T:
cost_of_equity (6.15%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.61) + 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.