FOSL
Fossil Group Inc
Price:  
1.48 
USD
Volume:  
121,506.00
United States | Textiles, Apparel & Luxury Goods
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Fossil WACC - Weighted Average Cost of Capital

The WACC of Fossil Group Inc (FOSL) is 5.8%.

The Cost of Equity of Fossil Group Inc (FOSL) is 6.90%.
The Cost of Debt of Fossil Group Inc (FOSL) is 8.95%.

Range Selected
Cost of equity 5.40% - 8.40% 6.90%
Tax rate 30.50% - 46.40% 38.45%
Cost of debt 7.00% - 10.90% 8.95%
WACC 5.0% - 6.6% 5.8%
WACC

Fossil WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.40%
Tax rate 30.50% 46.40%
Debt/Equity ratio 2.08 2.08
Cost of debt 7.00% 10.90%
After-tax WACC 5.0% 6.6%
Selected WACC 5.8%

Fossil'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 Fossil:

cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.