4972.T WACC - Weighted Average Cost of Capital
The WACC of Soken Chemical & Engineering Co Ltd (4972.T) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.1% - 10.0% | 8.55% |
| Tax rate | 27.6% - 28.5% | 28.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.5% - 9.1% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.94 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 10.0% |
| Tax rate | 27.6% | 28.5% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.5% | 9.1% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4972.T | Soken Chemical & Engineering Co Ltd | 0.17 | 0.89 | 0.8 |
| 4022.T | Rasa Industries Ltd | 0.26 | 1.1 | 0.93 |
| 4222.T | Kodama Chemical Industry Co Ltd | 0.46 | 1.59 | 1.19 |
| 4229.T | Gun Ei Chemical Industry Co Ltd | 0.04 | 0.84 | 0.82 |
| 4406.T | New Japan Chemical Co Ltd | 0.91 | 0.88 | 0.53 |
| 4629.T | Daishin Chemical Co Ltd | 0 | 0.22 | 0.22 |
| 5018.T | Moresco Corp | 0.45 | 0.47 | 0.36 |
| 6490.T | Nippon Pillar Packing Co Ltd | 0.12 | 1.42 | 1.31 |
| 6619.T | W-Scope Corp | 0.62 | 1.61 | 1.12 |
| 7908.T | Kimoto Co Ltd | 0 | 1.08 | 1.07 |
| Low | High | |
| Unlevered beta | 0.81 | 0.99 |
| Relevered beta | 0.91 | 1.1 |
| Adjusted relevered beta | 0.94 | 1.07 |
4972.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 4972.T:
cost_of_equity (8.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.