FLS.CO WACC - Weighted Average Cost of Capital
The WACC of Flsmidth & Co A/S (FLS.CO) is 7.9%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.2% | 8.25% |
| Tax rate | 36.3% - 36.3% | 36.3% |
| Cost of debt | 4.0% - 6.5% | 5.25% |
| WACC | 7.0% - 8.9% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.9 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.2% |
| Tax rate | 36.3% | 36.3% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 6.5% |
| After-tax WACC | 7.0% | 8.9% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FLS.CO | Flsmidth & Co A/S | 0.08 | 0.44 | 0.42 |
| BUCN.SW | Bucher Industries AG | 0.01 | 1.03 | 1.03 |
| CAF.MC | Construcciones Y Auxiliar De Ferrocarriles SA | 0.55 | 0.83 | 0.61 |
| JST.DE | JOST Werke AG | 0.43 | 1.02 | 0.8 |
| MTU.PA | Manitou BF SA | 0.51 | 1.82 | 1.37 |
| PAL.VI | Palfinger AG | 0.71 | 1.18 | 0.81 |
| ROS.VI | Rosenbauer International AG | 1.11 | 0.92 | 0.54 |
| SRAIL.SW | Stadler Rail AG | 0.43 | 1.03 | 0.81 |
| VOS.DE | Vossloh AG | 0.15 | 0.88 | 0.8 |
| WAC.DE | Wacker Neuson SE | 0.3 | 1.2 | 1.01 |
| Low | High | |
| Unlevered beta | 0.8 | 0.81 |
| Relevered beta | 0.85 | 0.85 |
| Adjusted relevered beta | 0.9 | 0.9 |
FLS.CO'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 FLS.CO:
cost_of_equity (8.25%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.9) + 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.