4971.T WACC - Weighted Average Cost of Capital
The WACC of MEC Co Ltd (4971.T) is 6.9%.
| Range | Selected | |
| Cost of equity | 9.1% - 12.5% | 10.8% |
| Tax rate | 28.2% - 29.4% | 28.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 7.8% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.27 | 1.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.1% | 12.5% |
| Tax rate | 28.2% | 29.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 7.8% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4971.T | MEC Co Ltd | 0.86 | 1.26 | 0.78 |
| 4080.T | Tanaka Chemical Corp | 0.69 | 1.46 | 0.98 |
| 4094.T | Nihon Kagaku Sangyo Co Ltd | 0.01 | 0.58 | 0.58 |
| 4112.T | Hodogaya Chemical Co Ltd | 0.41 | 1.4 | 1.08 |
| 4362.T | Nippon Fine Chemical Co Ltd | 0.02 | 1.28 | 1.26 |
| 4366.T | Daito Chemix Corp | 0.76 | 0.82 | 0.53 |
| 4367.T | Koei Chemical Co Ltd | 0.93 | 0.43 | 0.26 |
| 4462.T | Ishihara Chemical Co Ltd | 0 | 0.97 | 0.97 |
| 4975.T | JCU Corp | 0.01 | 0.88 | 0.88 |
| 4999.T | Cemedine Co Ltd | 0.02 | 1.01 | 0.99 |
| 6036.T | KeePer Technical Laboratory Co Ltd | 0 | 0.72 | 0.72 |
| Low | High | |
| Unlevered beta | 0.78 | 0.97 |
| Relevered beta | 1.4 | 1.63 |
| Adjusted relevered beta | 1.27 | 1.42 |
4971.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 4971.T:
cost_of_equity (10.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.27) + 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.