What is John Hancock Preferredome Fund III WACC %?
John Hancock Preferredome Fund IIIHPS 30 WACC % is 3.72% as of Jun. 25, 2026, which is 35% below its 10-year median of 5.75. GuruFocus rates HPS with a GF Score™ of 30/100. The stock has 6 warning signs investors should review. Among 1,657 Asset Management companies, John Hancock Preferredome Fund III ranks better than 77.37% on this metric.
As of today (2026-06-25), John Hancock Preferredome Fund III's weighted average cost of capital is 3.72%%. John Hancock Preferredome Fund III's ROIC % is 0.00% (calculated using TTM income statement data).
John Hancock Preferredome Fund III earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
John Hancock Preferredome Fund III (NYSE:HPS) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, John Hancock Preferredome Fund III's weighted average cost of capital is 3.72%%. John Hancock Preferredome Fund III's ROIC % is 0.00% (calculated using TTM income statement data).
John Hancock Preferredome Fund III earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
Related Terms
John Hancock Preferredome Fund III WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Asset Management subindustry, John Hancock Preferredome Fund III's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
John Hancock Preferredome Fund III WACC % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, John Hancock Preferredome Fund III's WACC % distribution charts can be found below:
* The bar in red indicates where John Hancock Preferredome Fund III's WACC % falls into.
John Hancock Preferredome Fund III WACC % Calculation
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, John Hancock Preferredome Fund III's market capitalization (E) is $459.371 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jan. 2026, John Hancock Preferredome Fund III's latest one-year semi-annual average Book Value of Debt (D) is $274.3 Mil.
a) weight of equity = E / (E + D) = 459.371 / (459.371 + 274.3) = 0.6261
b) weight of debt = D / (E + D) = 274.3 / (459.371 + 274.3) = 0.3739
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.386%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. John Hancock Preferredome Fund III's beta is -0.2359.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.386% + -0.2359 * 6% = 2.9706%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
As of Jan. 2026, John Hancock Preferredome Fund III's interest expense (positive number) was $13.636 Mil. Its total Book Value of Debt (D) is $274.3 Mil.
Cost of Debt = 13.636 / 274.3 = 4.9712%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0 / 37.738 = 0%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
John Hancock Preferredome Fund III (HPS) has a WACC % of 3.72% as of Jun. 25, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on John Hancock Preferredome Fund III and its competitors. This is 35% below median its historical median of 5.75. Over the past decade, John Hancock Preferredome Fund III's WACC % has ranged from 2.85 to 7.85. According to the industry distribution chart, John Hancock Preferredome Fund III ranks #375 out of 1657 companies in the Asset Management industry, placing it in the top 22.6%.
Is John Hancock Preferredome Fund III's WACC % too high?
John Hancock Preferredome Fund III's current WACC % of 3.72% is 35% below median its 10-year median of 5.75. Over the past 10 years, this metric has ranged from a low of 2.85 to a high of 7.85. The Asset Management industry median WACC % is 5.74. John Hancock Preferredome Fund III's value of 3.72% is 35.2% below this industry median. Based on the distribution chart, John Hancock Preferredome Fund III ranks #375 out of 1657 companies in the Asset Management industry, which is in the top quartile — a strong position relative to peers. Overall, John Hancock Preferredome Fund III has a GF Score™ of 30/100, reflecting its overall financial health beyond just this single metric.
How does John Hancock Preferredome Fund III's WACC % compare to VVR and NBB?
According to the Asset Management industry distribution chart, John Hancock Preferredome Fund III ranks #375 out of 1657 companies for WACC %. This places John Hancock Preferredome Fund III in the top 23% of its industry — outperforming the majority of peers. The industry median WACC % is 5.74. John Hancock Preferredome Fund III's value of 3.72% is 35.2% below this benchmark. Historically, John Hancock Preferredome Fund III's own WACC % has ranged from 2.85 to 7.85 over the past decade. While the company's 10-year median is 5.75 vs. the industry median of 5.74, John Hancock Preferredome Fund III has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Asset Management company?
The median WACC % among Asset Management companies is 5.74, based on 1,657 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. John Hancock Preferredome Fund III's current WACC % of 3.72% is 35.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on John Hancock Preferredome Fund III and its competitors. For the Asset Management industry, the median WACC % is 5.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. John Hancock Preferredome Fund III's current WACC % is 3.72%, which is 35% below median its own 10-year median of 5.75. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is John Hancock Preferredome Fund III stock overvalued right now?
John Hancock Preferredome Fund III (HPS) has a current WACC % of 3.72%. The current WACC % is 3.72%, which is 35% below median its 10-year median of 5.75 and 35.2% below the Asset Management industry median of 5.74. John Hancock Preferredome Fund III's overall GF Score™ is 30/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For John Hancock Preferredome Fund III (HPS), the current WACC % is 3.72% as of Jun. 25, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
John Hancock Preferredome Fund III Business Description
John Hancock Preferred Income Fund III is a closed-end, diversified management investment company. Its investment objective is to provide a high level of current income consistent with preservation of capital. The fund's secondary investment objective is to provide growth of capital to the extent consistent with its primary investment objective. It seeks to achieve the objectives by investing a majority of its assets in preferred stocks and other preferred securities, including convertible preferred securities. The portfolio composition of the company consists of the U.S. preferred securities, foreign preferred securities, common stocks, corporate bonds, and the short-term investments.
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