FCT.MI WACC - Weighted Average Cost of Capital

The WACC of Fincantieri SpA (FCT.MI) is 12.0%.

The Cost of Equity of Fincantieri SpA (FCT.MI) is 13.90%.

The Cost of Debt of Fincantieri SpA (FCT.MI) is 8.50%.

	Range	Selected
Cost of equity	12.20% - 15.60%	13.90%
Tax rate	11.60% - 19.60%	15.60%
Cost of debt	4.80% - 12.20%	8.50%
WACC	10.0% - 14.0%	12.0%

WACC

FCT.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.03	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	15.60%

Tax rate	11.60%	19.60%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.80%	12.20%

After-tax WACC	10.0%	14.0%


Selected WACC	12.0%

FCT.MI'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 FCT.MI:

cost_of_equity (13.90%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.