The primary objectives are to confirm that donepezil hydrochloride has superior efficacy compared with placebo in improving cognitive function, as measured by Alzheimer's Disease Assessment Scale-Cognitive subscale (ADAS-cog), and to demonstrate that donepezil hydrochloride has superior efficacy compared with placebo in improving global function, as measured by Clinician's Interview-Based Impression of Change-plus Caregiver Input (CIBIC-plus), in patients with dementia associated with cerebrovascular disease (VaD).

This is a multi-center, randomized, double-blind, placebo-controlled, parallel-group study with an open-label extension. The study consists of 3 phases; screening phase (1 to 4 weeks), double-blind phase (24 weeks), and Open-label extension phase (24 weeks). Participants, who have completed the double-blind phase and want to continue the study participation, can be enrolled in the 24-week open-label extension phase.

Inclusion Criteria:

Patients who meet all of the following criteria will be eligible for inclusion in the study:

1. Male or female, age greater than or equal to (>=) 40 years at the time of informed consent.
2. Possible or probable dementia associated with cerebrovascular disease as defined by National Institute of Neurological Disorders and Stroke (NINDS) and the Association Internationale pour la Recherche et l'Enseignement en Neurosciences (AIREN) criteria (NINDS-AIREN Criteria) with dementia of greater than 3 months duration.
3. Radiological evidence of cerebrovascular disease.
4. Mini-Mental Status Examination (MMSE) score is ≥ 10 and ≤ 24.
5. Clinical Dementia Rating (CDR) ≥ 1.
6. Outpatients who are physically healthy, and ambulatory or ambulatory-aided (i.e., walker, cane or wheelchair).
7. Written informed consent (IC) is obtained from the patient (if possible) and from the patient's legal guardian prior to being exposed to any study-related procedures. The caregiver must separately provide IC for his/her own participation in the study.
8. Patients having caregivers who submit written consent to cooperate with this study, have regular contact with the patient (i.e., an average of ≥ 4 hours/day and ≥ 3 days/week), provide patients' information necessary for this study, ensure the regular administration of assigned donepezil, as well as all concomitant therapies, at the correct dose, and escort the patients on required visits to study institution.
9. Comorbid medical conditions are clinically stable prior to Baseline, unless otherwise specified.

Exclusion Criteria

Patients who meet any of the following criteria will be excluded:

1. Anti-dementia drug therapy (cholinesterase inhibitors or memantine) within 12 weeks prior to Screening.
2. Clinical and/or radiological evidence for other serious degenerative neurological disorders or neuropsychiatric disorders.
3. Known human immunodeficiency virus disease, neurosyphilis, or a history of significant head trauma followed by persistent neurological deficits or known structural brain abnormalities.
4. Hypothyroidism at Screening.
5. Vitamin B12 or folate deficiency at Screening.
6. Evidence of a new transient ischemic attack (TIA) or stroke that occurs within 12 weeks prior to Screening, even if the symptoms are minor and do not require hospitalization, are excluded.
7. Supine diastolic blood pressure ≥ 95 mmHg.
8. Complication of sick sinus syndrome, abnormal auricular and atrioventricular (AV) junction conductions (AV block, ≥ II ventricular block, etc.), or with a prolonged QT/QTc interval (> 450 ms) as demonstrated by a repeated electrocardiogram (ECG).
9. A history of life-threatening arrhythmias.
10. A history of malignant neoplasms treated within 5 years prior to study entry, current evidence of malignant neoplasm, recurrent, or metastatic disease.
11. A known or suspected history of drug or alcohol dependency or abuse.
12. Abnormal clinical laboratory values which are judged clinically significant by the investigator.
13. Patients who cannot swallow or who have difficulty swallowing whole tablets, as tablets should not be broken or crushed.
14. Known plan for elective surgery that would require general anesthesia and administration of neuromuscular blocking agents.
15. Pregnant women, lactating women, or women of child-bearing potential who don't agree to practice effective contraception throughout the entire study period and for 30 days after donepezil discontinuation, or who don't have a negative serum â-Human chorionic gonadotropin (HCG) test result or a negative urine pregnancy test result.