4615.T WACC - Weighted Average Cost of Capital

The WACC of Shinto Paint Co Ltd (4615.T) is 9.4%.

The Cost of Equity of Shinto Paint Co Ltd (4615.T) is 11.05%.

The Cost of Debt of Shinto Paint Co Ltd (4615.T) is 11.20%.

	Range	Selected
Cost of equity	7.90% - 14.20%	11.05%
Tax rate	23.00% - 28.10%	25.55%
Cost of debt	4.00% - 18.40%	11.20%
WACC	5.1% - 13.6%	9.4%

WACC

4615.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.07	1.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	14.20%

Tax rate	23.00%	28.10%
Debt/Equity ratio	1.37	1.37
Cost of debt	4.00%	18.40%

After-tax WACC	5.1%	13.6%


Selected WACC	9.4%

4615.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 4615.T:

cost_of_equity (11.05%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.07) + 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.