5301.T WACC - Weighted Average Cost of Capital
The WACC of Tokai Carbon Co Ltd (5301.T) is 5.5%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.5% | 7.7% |
| Tax rate | 24.5% - 33.0% | 28.75% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.5% - 6.5% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.73 | 1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.5% |
| Tax rate | 24.5% | 33.0% |
| Debt/Equity ratio | 0.89 | 0.89 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.5% | 6.5% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 5301.T | Tokai Carbon Co Ltd | 0.89 | 0.99 | 0.62 |
| 3101.T | Toyobo Co Ltd | 3.16 | 0.55 | 0.18 |
| 4023.T | Kureha Corp | 0.33 | 0.53 | 0.43 |
| 4205.T | Zeon Corp | 0.08 | 0.79 | 0.75 |
| 4215.T | CI Takiron Corp | 0.1 | 0.15 | 0.14 |
| 4228.T | Sekisui Kasei Co Ltd | 2.76 | 0.77 | 0.27 |
| 4249.T | Moriroku Holdings Co Ltd | 0.73 | 0.95 | 0.63 |
| 4401.T | Adeka Corp | 0.29 | 0.89 | 0.74 |
| 4410.T | Harima Chemicals Group Inc | 2.09 | 0.67 | 0.27 |
| 7966.T | Lintec Corp | 0.05 | 1.07 | 1.04 |
| Low | High | |
| Unlevered beta | 0.37 | 0.62 |
| Relevered beta | 0.6 | 1 |
| Adjusted relevered beta | 0.73 | 1 |
5301.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 5301.T:
cost_of_equity (7.70%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.73) + 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.