3528.T WACC - Weighted Average Cost of Capital

The WACC of Prospect Co Ltd (3528.T) is 6.7%.

The Cost of Equity of Prospect Co Ltd (3528.T) is 6.55%.

The Cost of Debt of Prospect Co Ltd (3528.T) is 8.60%.

	Range	Selected
Cost of equity	5.50% - 7.60%	6.55%
Tax rate	15.50% - 21.40%	18.45%
Cost of debt	4.00% - 13.20%	8.60%
WACC	4.7% - 8.6%	6.7%

WACC

3528.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.66	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.60%

Tax rate	15.50%	21.40%
Debt/Equity ratio	0.59	0.59
Cost of debt	4.00%	13.20%

After-tax WACC	4.7%	8.6%


Selected WACC	6.7%

3528.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 3528.T:

cost_of_equity (6.55%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.66) + 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.