7201.T WACC - Weighted Average Cost of Capital
The WACC of Nissan Motor Co Ltd (7201.T) is 10.4%.
| Range | Selected | |
| Cost of equity | 21.6% - 29.6% | 25.6% |
| Tax rate | 33.6% - 38.7% | 36.15% |
| Cost of debt | 4.0% - 21.4% | 12.7% |
| WACC | 5.4% - 15.5% | 10.4% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 3.29 | 3.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.6% | 29.6% |
| Tax rate | 33.6% | 38.7% |
| Debt/Equity ratio | 5.91 | 5.91 |
| Cost of debt | 4.0% | 21.4% |
| After-tax WACC | 5.4% | 15.5% |
| Selected WACC | 10.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7201.T | Nissan Motor Co Ltd | 5.91 | 1.06 | 0.23 |
| 000550.SZ | Jiangling Motors Corp Ltd | 0.12 | 1.36 | 1.27 |
| 600733.SS | BAIC BluePark New Energy Technology Co Ltd | 0.49 | 1.58 | 1.21 |
| 7211.T | Mitsubishi Motors Corp | 0.49 | 1.17 | 0.89 |
| 7261.T | Mazda Motor Corp | 1.25 | 1.36 | 0.76 |
| 7267.T | Honda Motor Co Ltd | 1.48 | 1.17 | 0.61 |
| 7269.T | Suzuki Motor Corp | 0.2 | 1.1 | 0.98 |
| 7270.T | Subaru Corp | 0.27 | 1.29 | 1.11 |
| M&M.NS | Mahindra and Mahindra Ltd | 0.3 | 1.77 | 1.49 |
| TATAMOTORS.NS | Tata Motors Ltd | 0.41 | 1.4 | 1.11 |
| Low | High | |
| Unlevered beta | 0.95 | 1.11 |
| Relevered beta | 4.42 | 5.19 |
| Adjusted relevered beta | 3.29 | 3.81 |
7201.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 7201.T:
cost_of_equity (25.60%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (3.29) + 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.