FLEX
Flex Ltd
Price:  
36.59 
USD
Volume:  
3,654,884.00
Singapore | Electronic Equipment, Instruments & Components
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FLEX WACC - Weighted Average Cost of Capital

The WACC of Flex Ltd (FLEX) is 9.5%.

The Cost of Equity of Flex Ltd (FLEX) is 10.75%.
The Cost of Debt of Flex Ltd (FLEX) is 5.00%.

Range Selected
Cost of equity 9.10% - 12.40% 10.75%
Tax rate 12.50% - 20.90% 16.70%
Cost of debt 4.80% - 5.20% 5.00%
WACC 8.2% - 10.9% 9.5%
WACC

FLEX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.14 1.35
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 12.40%
Tax rate 12.50% 20.90%
Debt/Equity ratio 0.23 0.23
Cost of debt 4.80% 5.20%
After-tax WACC 8.2% 10.9%
Selected WACC 9.5%

FLEX'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 FLEX:

cost_of_equity (10.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.14) + 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.