5707.T WACC - Weighted Average Cost of Capital

The WACC of Toho Zinc Co Ltd (5707.T) is 4.8%.

The Cost of Equity of Toho Zinc Co Ltd (5707.T) is 15.90%.

The Cost of Debt of Toho Zinc Co Ltd (5707.T) is 4.25%.

	Range	Selected
Cost of equity	13.60% - 18.20%	15.90%
Tax rate	19.20% - 27.40%	23.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.5% - 5.1%	4.8%

WACC

5707.T WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.99	2.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	18.20%

Tax rate	19.20%	27.40%
Debt/Equity ratio	7.19	7.19
Cost of debt	4.00%	4.50%

After-tax WACC	4.5%	5.1%


Selected WACC	4.8%

5707.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 5707.T:

cost_of_equity (15.90%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (1.99) + 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.