FCX
Freeport-McMoRan Inc
Price:  
37.86 
USD
Volume:  
7,295,792.00
United States | Metals & Mining
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FCX WACC - Weighted Average Cost of Capital

The WACC of Freeport-McMoRan Inc (FCX) is 9.2%.

The Cost of Equity of Freeport-McMoRan Inc (FCX) is 10.30%.
The Cost of Debt of Freeport-McMoRan Inc (FCX) is 4.40%.

Range Selected
Cost of equity 8.30% - 12.30% 10.30%
Tax rate 35.40% - 37.00% 36.20%
Cost of debt 4.30% - 4.50% 4.40%
WACC 7.5% - 10.9% 9.2%
WACC

FCX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.95 1.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 12.30%
Tax rate 35.40% 37.00%
Debt/Equity ratio 0.17 0.17
Cost of debt 4.30% 4.50%
After-tax WACC 7.5% 10.9%
Selected WACC 9.2%

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 (10.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.95) + 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.