FLOW
SPX FLOW Inc
Price:  
30.02 
USD
Volume:  
176.00
United States | Machinery
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FLOW WACC - Weighted Average Cost of Capital

The WACC of SPX FLOW Inc (FLOW) is 8.5%.

The Cost of Equity of SPX FLOW Inc (FLOW) is 9.15%.
The Cost of Debt of SPX FLOW Inc (FLOW) is 4.95%.

Range Selected
Cost of equity 7.90% - 10.40% 9.15%
Tax rate 40.30% - 48.60% 44.45%
Cost of debt 4.30% - 5.60% 4.95%
WACC 7.3% - 9.7% 8.5%
WACC

FLOW WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 1.11 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.40%
Tax rate 40.30% 48.60%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.30% 5.60%
After-tax WACC 7.3% 9.7%
Selected WACC 8.5%

FLOW'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 FLOW:

cost_of_equity (9.15%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.11) + 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.