FED.MI WACC - Weighted Average Cost of Capital

The WACC of Giorgio Fedon & Figli SpA (FED.MI) is 8.0%.

The Cost of Equity of Giorgio Fedon & Figli SpA (FED.MI) is 10.90%.

The Cost of Debt of Giorgio Fedon & Figli SpA (FED.MI) is 5.00%.

	Range	Selected
Cost of equity	9.60% - 12.20%	10.90%
Tax rate	13.80% - 37.20%	25.50%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.4% - 8.5%	8.0%

WACC

FED.MI WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.83	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.20%

Tax rate	13.80%	37.20%
Debt/Equity ratio	0.7	0.7
Cost of debt	5.00%	5.00%

After-tax WACC	7.4%	8.5%


Selected WACC	8.0%

FED.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 FED.MI:

cost_of_equity (10.90%) = risk_free_rate (4.05%) + equity_risk_premium (7.40%) * adjusted_beta (0.83) + 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.