4973.T WACC - Weighted Average Cost of Capital
The WACC of Japan Pure Chemical Co Ltd (4973.T) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.8% | 6.45% |
| Tax rate | 26.0% - 26.4% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.4% - 5.8% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.6 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.8% |
| Tax rate | 26.0% | 26.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.4% | 5.8% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 4973.T | Japan Pure Chemical Co Ltd | 1.08 | 0.58 | 0.32 |
| 4098.T | Titan Kogyo Ltd | 2.97 | 0.53 | 0.17 |
| 4364.T | Manac Incorporated | 0.05 | 0.3 | 0.29 |
| 4366.T | Daito Chemix Corp | 0.76 | 0.82 | 0.53 |
| 4367.T | Koei Chemical Co Ltd | 0.93 | 0.43 | 0.26 |
| 4409.T | Toho Chemical Industry Co Ltd | 1.97 | 0.41 | 0.17 |
| 4462.T | Ishihara Chemical Co Ltd | 0 | 0.97 | 0.97 |
| 4463.T | Nicca Chemical Co Ltd | 0.47 | 0.09 | 0.07 |
| 4616.T | Kawakami Paint Mfg Co Ltd | 1.16 | 0.38 | 0.21 |
| 4625.T | Atomix Co Ltd | 0.06 | 0.53 | 0.51 |
| 4957.T | Yasuhara Chemical Co Ltd | 0.39 | 0.82 | 0.64 |
| Low | High | |
| Unlevered beta | 0.26 | 0.32 |
| Relevered beta | 0.4 | 0.64 |
| Adjusted relevered beta | 0.6 | 0.76 |
4973.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 4973.T:
cost_of_equity (6.45%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.6) + 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.