6863.T
Nireco Corp
Price:  
2,084.00 
JPY
Volume:  
7,000.00
Japan | Machinery
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6863.T WACC - Weighted Average Cost of Capital

The WACC of Nireco Corp (6863.T) is 7.3%.

The Cost of Equity of Nireco Corp (6863.T) is 7.40%.
The Cost of Debt of Nireco Corp (6863.T) is 4.25%.

Range Selected
Cost of equity 6.40% - 8.40% 7.40%
Tax rate 31.00% - 31.40% 31.20%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.3% - 8.4% 7.3%
WACC

6863.T WACC calculation

Category Low High
Long-term bond rate 1.4% 1.9%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.81 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.40%
Tax rate 31.00% 31.40%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 4.50%
After-tax WACC 6.3% 8.4%
Selected WACC 7.3%

6863.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 6863.T:

cost_of_equity (7.40%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.81) + 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.