7201.T WACC - Weighted Average Cost of Capital

The WACC of Nissan Motor Co Ltd (7201.T) is 10.5%.

The Cost of Equity of Nissan Motor Co Ltd (7201.T) is 26.30%.

The Cost of Debt of Nissan Motor Co Ltd (7201.T) is 12.70%.

	Range	Selected
Cost of equity	23.60% - 29.00%	26.30%
Tax rate	33.60% - 38.70%	36.15%
Cost of debt	4.00% - 21.40%	12.70%
WACC	5.6% - 15.3%	10.5%

WACC

7201.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	3.62	3.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	23.60%	29.00%

Tax rate	33.60%	38.70%
Debt/Equity ratio	6.14	6.14
Cost of debt	4.00%	21.40%

After-tax WACC	5.6%	15.3%


Selected WACC	10.5%

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 (26.30%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (3.62) + 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.