FER.WA WACC - Weighted Average Cost of Capital

The WACC of Ferrum SA (FER.WA) is 7.4%.

The Cost of Equity of Ferrum SA (FER.WA) is 9.60%.

The Cost of Debt of Ferrum SA (FER.WA) is 6.55%.

	Range	Selected
Cost of equity	8.60% - 10.60%	9.60%
Tax rate	12.50% - 21.50%	17.00%
Cost of debt	4.00% - 9.10%	6.55%
WACC	6.0% - 8.8%	7.4%

WACC

FER.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.48	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	10.60%

Tax rate	12.50%	21.50%
Debt/Equity ratio	1.03	1.03
Cost of debt	4.00%	9.10%

After-tax WACC	6.0%	8.8%


Selected WACC	7.4%

FER.WA'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 FER.WA:

cost_of_equity (9.60%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.48) + 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.