6996.T
Nichicon Corp
Price:  
1,162.00 
JPY
Volume:  
145,300.00
Japan | Electronic Equipment, Instruments & Components
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6996.T WACC - Weighted Average Cost of Capital

The WACC of Nichicon Corp (6996.T) is 6.9%.

The Cost of Equity of Nichicon Corp (6996.T) is 8.35%.
The Cost of Debt of Nichicon Corp (6996.T) is 4.25%.

Range Selected
Cost of equity 7.10% - 9.60% 8.35%
Tax rate 17.90% - 18.60% 18.25%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.9% - 7.8% 6.9%
WACC

6996.T WACC calculation

Category Low High
Long-term bond rate 1.4% 1.9%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.93 1.01
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 9.60%
Tax rate 17.90% 18.60%
Debt/Equity ratio 0.44 0.44
Cost of debt 4.00% 4.50%
After-tax WACC 5.9% 7.8%
Selected WACC 6.9%

6996.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 6996.T:

cost_of_equity (8.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.