FLS
Flowserve Corp
Price:  
55.29 
USD
Volume:  
3,161,042
United States | Machinery

FLS WACC - Weighted Average Cost of Capital

The WACC of Flowserve Corp (FLS) is 9.3%.

The Cost of Equity of Flowserve Corp (FLS) is 10.55%.
The Cost of Debt of Flowserve Corp (FLS) is 4.65%.

RangeSelected
Cost of equity9.1% - 12.0%10.55%
Tax rate16.5% - 24.5%20.5%
Cost of debt4.5% - 4.8%4.65%
WACC8.1% - 10.5%9.3%
WACC

FLS WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.131.27
Additional risk adjustments0.0%0.5%
Cost of equity9.1%12.0%
Tax rate16.5%24.5%
Debt/Equity ratio
0.210.21
Cost of debt4.5%4.8%
After-tax WACC8.1%10.5%
Selected WACC9.3%

FLS'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:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.13) + 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.