5184.T WACC - Weighted Average Cost of Capital

The WACC of Nichirin Co Ltd (5184.T) is 7.5%.

The Cost of Equity of Nichirin Co Ltd (5184.T) is 7.60%.

The Cost of Debt of Nichirin Co Ltd (5184.T) is 4.25%.

	Range	Selected
Cost of equity	6.20% - 9.00%	7.60%
Tax rate	29.70% - 30.70%	30.20%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.1% - 8.8%	7.5%

WACC

5184.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.79	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.00%

Tax rate	29.70%	30.70%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	4.50%

After-tax WACC	6.1%	8.8%


Selected WACC	7.5%

5184.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 5184.T:

cost_of_equity (7.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.