FNM.MI WACC - Weighted Average Cost of Capital
The WACC of FNM SpA (FNM.MI) is 7.3%.
| Range | Selected | |
| Cost of equity | 24.7% - 32.6% | 28.65% |
| Tax rate | 18.9% - 24.7% | 21.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.6% - 8.0% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 2.53 | 3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.7% | 32.6% |
| Tax rate | 18.9% | 24.7% |
| Debt/Equity ratio | 5.35 | 5.35 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.6% | 8.0% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FNM.MI | FNM SpA | 5.35 | 0.37 | 0.07 |
| BVZN.SW | BVZ Holding AG | 2.07 | 0.29 | 0.11 |
| FQT.DE | Frequentis AG | 0.08 | 1 | 0.94 |
| GLTR.L | Globaltrans Investment PLC | 0.6 | 0.99 | 0.68 |
| GOG.L | Go-Ahead Group PLC | 1.06 | 1.74 | 0.96 |
| HSP.L | Hargreaves Services PLC | 0.14 | 0.83 | 0.75 |
| JFN.SW | Jungfraubahn Holding AG | 0.1 | 0.51 | 0.47 |
| PKP.WA | PKP Cargo SA | 4.04 | 0.48 | 0.12 |
| XPD.L | Xpediator PLC | 1.23 | 1.51 | 0.77 |
| KSU | Kansas City Southern | 0.14 | 1.09 | 0.98 |
| Low | High | |
| Unlevered beta | 0.59 | 0.76 |
| Relevered beta | 3.28 | 3.99 |
| Adjusted relevered beta | 2.53 | 3 |
FNM.MI'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 FNM.MI:
cost_of_equity (28.65%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (2.53) + 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.