8951.T WACC - Weighted Average Cost of Capital

The WACC of Nippon Building Fund Inc (8951.T) is 5.3%.

The Cost of Equity of Nippon Building Fund Inc (8951.T) is 5.95%.

The Cost of Debt of Nippon Building Fund Inc (8951.T) is 4.25%.

	Range	Selected
Cost of equity	5.20% - 6.70%	5.95%
Tax rate	-% - -%	-%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.8% - 5.9%	5.3%

WACC

8951.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.45	0.46

Additional risk adjustments	1.0%	1.5%
Cost of equity	5.20%	6.70%

Tax rate	-%	-%
Debt/Equity ratio	0.52	0.52
Cost of debt	4.00%	4.50%

After-tax WACC	4.8%	5.9%


Selected WACC	5.3%

8951.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 8951.T:

cost_of_equity (5.95%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.45) + risk_adjustments (1.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.