7970.T
Shin-Etsu Polymer Co Ltd
Price:  
1,695 
JPY
Volume:  
88,000
Japan | Chemicals

7970.T WACC - Weighted Average Cost of Capital

The WACC of Shin-Etsu Polymer Co Ltd (7970.T) is 6.9%.

The Cost of Equity of Shin-Etsu Polymer Co Ltd (7970.T) is 6.95%.
The Cost of Debt of Shin-Etsu Polymer Co Ltd (7970.T) is 4.25%.

RangeSelected
Cost of equity5.8% - 8.1%6.95%
Tax rate27.7% - 28.8%28.25%
Cost of debt4.0% - 4.5%4.25%
WACC5.8% - 8.1%6.9%
WACC

7970.T WACC calculation

CategoryLowHigh
Long-term bond rate1.4%1.9%
Equity market risk premium6.1%7.1%
Adjusted beta0.720.8
Additional risk adjustments0.0%0.5%
Cost of equity5.8%8.1%
Tax rate27.7%28.8%
Debt/Equity ratio
00
Cost of debt4.0%4.5%
After-tax WACC5.8%8.1%
Selected WACC6.9%

7970.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 7970.T:

cost_of_equity (6.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.72) + 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.