9505.T WACC - Weighted Average Cost of Capital

The WACC of Hokuriku Electric Power Co (9505.T) is 5.8%.

The Cost of Equity of Hokuriku Electric Power Co (9505.T) is 20.35%.

The Cost of Debt of Hokuriku Electric Power Co (9505.T) is 5.30%.

	Range	Selected
Cost of equity	8.70% - 32.00%	20.35%
Tax rate	21.50% - 31.30%	26.40%
Cost of debt	4.00% - 6.60%	5.30%
WACC	3.8% - 7.7%	5.8%

WACC

9505.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.19	4.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	32.00%

Tax rate	21.50%	31.30%
Debt/Equity ratio	7.61	7.61
Cost of debt	4.00%	6.60%

After-tax WACC	3.8%	7.7%


Selected WACC	5.8%

9505.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 9505.T:

cost_of_equity (20.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.19) + 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.