FCX
Freeport-McMoRan Inc
Price:  
39.06 
USD
Volume:  
10,287,658
United States | Metals & Mining

FCX WACC - Weighted Average Cost of Capital

The WACC of Freeport-McMoRan Inc (FCX) is 9.1%.

The Cost of Equity of Freeport-McMoRan Inc (FCX) is 10.1%.
The Cost of Debt of Freeport-McMoRan Inc (FCX) is 4.4%.

RangeSelected
Cost of equity8.3% - 11.9%10.1%
Tax rate35.4% - 37.0%36.2%
Cost of debt4.3% - 4.5%4.4%
WACC7.5% - 10.6%9.1%
WACC

FCX WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.971.26
Additional risk adjustments0.0%0.5%
Cost of equity8.3%11.9%
Tax rate35.4%37.0%
Debt/Equity ratio
0.160.16
Cost of debt4.3%4.5%
After-tax WACC7.5%10.6%
Selected WACC9.1%

FCX'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 FCX:

cost_of_equity (10.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.97) + 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.