6997.T WACC - Weighted Average Cost of Capital
The WACC of Nippon Chemi-Con Corp (6997.T) is 5.5%.
| Range | Selected | |
| Cost of equity | 9.7% - 14.0% | 11.85% |
| Tax rate | 14.4% - 28.9% | 21.65% |
| Cost of debt | 4.0% - 5.0% | 4.5% |
| WACC | 5.0% - 6.1% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.36 | 1.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 14.0% |
| Tax rate | 14.4% | 28.9% |
| Debt/Equity ratio | 3.1 | 3.1 |
| Cost of debt | 4.0% | 5.0% |
| After-tax WACC | 5.0% | 6.1% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6997.T | Nippon Chemi-Con Corp | 3.1 | 1.52 | 0.42 |
| 6699.T | Diamond Electric Holdings Co Ltd | 7.28 | 1.46 | 0.2 |
| 6768.T | Tamura Corp | 0.91 | 1.38 | 0.78 |
| 6787.T | Meiko Electronics Co Ltd | 0.56 | 1.91 | 1.29 |
| 6798.T | SMK Corp | 0.99 | 0.77 | 0.42 |
| 6817.T | Sumida Corp | 1.73 | 1.1 | 0.45 |
| 6837.T | Kyosha Co Ltd | 1.56 | 1.01 | 0.44 |
| 6881.T | Kyoden Co Ltd | 0.75 | 0.23 | 0.14 |
| 6958.T | CMK Corp | 1.83 | 1.72 | 0.68 |
| 6996.T | Nichicon Corp | 0.44 | 0.99 | 0.72 |
| Low | High | |
| Unlevered beta | 0.43 | 0.54 |
| Relevered beta | 1.54 | 1.94 |
| Adjusted relevered beta | 1.36 | 1.63 |
6997.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 6997.T:
cost_of_equity (11.85%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.36) + 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.