7018.T WACC - Weighted Average Cost of Capital

The WACC of Naikai Zosen Corp (7018.T) is 7.0%.

The Cost of Equity of Naikai Zosen Corp (7018.T) is 11.55%.

The Cost of Debt of Naikai Zosen Corp (7018.T) is 4.25%.

	Range	Selected
Cost of equity	9.40% - 13.70%	11.55%
Tax rate	21.30% - 41.60%	31.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.1% - 7.9%	7.0%

WACC

7018.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.3	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.70%

Tax rate	21.30%	41.60%
Debt/Equity ratio	1.1	1.1
Cost of debt	4.00%	4.50%

After-tax WACC	6.1%	7.9%


Selected WACC	7.0%

7018.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 7018.T:

cost_of_equity (11.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.3) + 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.