7862.T WACC - Weighted Average Cost of Capital

The WACC of Toppan Forms Co Ltd (7862.T) is 5.4%.

The Cost of Equity of Toppan Forms Co Ltd (7862.T) is 5.40%.

The Cost of Debt of Toppan Forms Co Ltd (7862.T) is 5.10%.

	Range	Selected
Cost of equity	4.40% - 6.40%	5.40%
Tax rate	39.40% - 39.80%	39.60%
Cost of debt	4.00% - 6.20%	5.10%
WACC	4.4% - 6.4%	5.4%

WACC

7862.T WACC calculation

Category	Low	High

Long-term bond rate	0.8%	1.2%
Equity market risk premium	5.4%	6.4%
Adjusted beta	0.67	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.40%	6.40%

Tax rate	39.40%	39.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	6.20%

After-tax WACC	4.4%	6.4%


Selected WACC	5.4%

7862.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 7862.T:

cost_of_equity (5.40%) = risk_free_rate (1.00%) + equity_risk_premium (5.90%) * adjusted_beta (0.67) + 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.