4596.T WACC - Weighted Average Cost of Capital

The WACC of Kubota Pharmaceutical Holdings Co Ltd (4596.T) is 6.5%.

The Cost of Equity of Kubota Pharmaceutical Holdings Co Ltd (4596.T) is 6.50%.

The Cost of Debt of Kubota Pharmaceutical Holdings Co Ltd (4596.T) is 6.35%.

	Range	Selected
Cost of equity	5.40% - 7.60%	6.50%
Tax rate	27.70% - 30.60%	29.15%
Cost of debt	5.70% - 7.00%	6.35%
WACC	5.4% - 7.6%	6.5%

WACC

4596.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.49	0.59

Additional risk adjustments	1.0%	1.5%
Cost of equity	5.40%	7.60%

Tax rate	27.70%	30.60%
Debt/Equity ratio	0	0
Cost of debt	5.70%	7.00%

After-tax WACC	5.4%	7.6%


Selected WACC	6.5%

4596.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 4596.T:

cost_of_equity (6.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.49) + risk_adjustments (1.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.