4611.T WACC - Weighted Average Cost of Capital

The WACC of Dai Nippon Toryo Co Ltd (4611.T) is 7.8%.

The Cost of Equity of Dai Nippon Toryo Co Ltd (4611.T) is 9.50%.

The Cost of Debt of Dai Nippon Toryo Co Ltd (4611.T) is 4.25%.

	Range	Selected
Cost of equity	8.10% - 10.90%	9.50%
Tax rate	29.80% - 32.80%	31.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.7% - 8.9%	7.8%

WACC

4611.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.09	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.90%

Tax rate	29.80%	32.80%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.00%	4.50%

After-tax WACC	6.7%	8.9%


Selected WACC	7.8%

4611.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 4611.T:

cost_of_equity (9.50%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.09) + 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.