FFIV
F5 Networks Inc
Price:  
281.59 
USD
Volume:  
564,176.00
United States | Communications Equipment
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FFIV WACC - Weighted Average Cost of Capital

The WACC of F5 Networks Inc (FFIV) is 7.3%.

The Cost of Equity of F5 Networks Inc (FFIV) is 10.55%.
The Cost of Debt of F5 Networks Inc (FFIV) is 5.00%.

Range Selected
Cost of equity 8.60% - 12.50% 10.55%
Tax rate 17.70% - 18.60% 18.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.4% - 8.3% 7.3%
WACC

FFIV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.03 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 12.50%
Tax rate 17.70% 18.60%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.4% 8.3%
Selected WACC 7.3%

FFIV'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 FFIV:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.