5707.T WACC - Weighted Average Cost of Capital

The WACC of Toho Zinc Co Ltd (5707.T) is 7.4%.

The Cost of Equity of Toho Zinc Co Ltd (5707.T) is 25.10%.

The Cost of Debt of Toho Zinc Co Ltd (5707.T) is 4.50%.

	Range	Selected
Cost of equity	20.40% - 29.80%	25.10%
Tax rate	19.20% - 27.40%	23.30%
Cost of debt	4.00% - 5.00%	4.50%
WACC	6.4% - 8.4%	7.4%

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	3.1	3.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.40%	29.80%

Tax rate	19.20%	27.40%
Debt/Equity ratio	4.46	4.46
Cost of debt	4.00%	5.00%

After-tax WACC	6.4%	8.4%


Selected WACC	7.4%

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 (25.10%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (3.1) + 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.