3352.T WACC - Weighted Average Cost of Capital

The WACC of Buffalo Co Ltd (3352.T) is 5.6%.

The Cost of Equity of Buffalo Co Ltd (3352.T) is 5.65%.

The Cost of Debt of Buffalo Co Ltd (3352.T) is 5.20%.

	Range	Selected
Cost of equity	4.80% - 6.50%	5.65%
Tax rate	34.00% - 36.10%	35.05%
Cost of debt	4.00% - 6.40%	5.20%
WACC	4.7% - 6.4%	5.6%

WACC

3352.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.55	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.50%

Tax rate	34.00%	36.10%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	6.40%

After-tax WACC	4.7%	6.4%


Selected WACC	5.6%

3352.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 3352.T:

cost_of_equity (5.65%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.55) + 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.