FRO.WA WACC - Weighted Average Cost of Capital

The WACC of Ferro SA (FRO.WA) is 8.2%.

The Cost of Equity of Ferro SA (FRO.WA) is 8.85%.

The Cost of Debt of Ferro SA (FRO.WA) is 5.80%.

	Range	Selected
Cost of equity	7.70% - 10.00%	8.85%
Tax rate	17.20% - 18.40%	17.80%
Cost of debt	5.50% - 6.10%	5.80%
WACC	7.2% - 9.2%	8.2%

WACC

FRO.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.34	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.00%

Tax rate	17.20%	18.40%
Debt/Equity ratio	0.18	0.18
Cost of debt	5.50%	6.10%

After-tax WACC	7.2%	9.2%


Selected WACC	8.2%

FRO.WA'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 FRO.WA:

cost_of_equity (8.85%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * 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.