PLD
Prologis Inc
Price:  
105.69 
USD
Volume:  
6,746,281.00
United States | Equity Real Estate Investment Trusts (REITs)
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PLD WACC - Weighted Average Cost of Capital

The WACC of Prologis Inc (PLD) is 6.4%.

The Cost of Equity of Prologis Inc (PLD) is 7.10%.
The Cost of Debt of Prologis Inc (PLD) is 4.55%.

Range Selected
Cost of equity 5.80% - 8.40% 7.10%
Tax rate 4.80% - 5.60% 5.20%
Cost of debt 4.00% - 5.10% 4.55%
WACC 5.3% - 7.5% 6.4%
WACC

PLD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.41 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 8.40%
Tax rate 4.80% 5.60%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.00% 5.10%
After-tax WACC 5.3% 7.5%
Selected WACC 6.4%

PLD'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 PLD:

cost_of_equity (7.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.