FXPO.L WACC - Weighted Average Cost of Capital
The WACC of Ferrexpo PLC (FXPO.L) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.9% - 8.8% | 7.85% |
| Tax rate | 21.8% - 28.4% | 25.1% |
| Cost of debt | 7.0% - 7.2% | 7.1% |
| WACC | 6.9% - 8.8% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.48 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 8.8% |
| Tax rate | 21.8% | 28.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.0% | 7.2% |
| After-tax WACC | 6.9% | 8.8% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FXPO.L | Ferrexpo PLC | 0.01 | 3.34 | 3.32 |
| AFAGR.HE | Afarak Group Plc | 0.03 | 0.73 | 0.71 |
| IRON.L | Ironveld PLC | 0.01 | -0.07 | -0.07 |
| IZMDC.IS | Izmir Demir Celik Sanayi AS | 0.94 | 0.62 | 0.36 |
| JSW.WA | Jastrzebska Spolka Weglowa SA | 0.93 | 0.85 | 0.5 |
| KMR.L | Kenmare Resources PLC | 0.18 | 0.34 | 0.3 |
| NIO.ST | Nordic Iron Ore AB | 0.01 | -0.04 | -0.04 |
| POG.L | Petropavlovsk PLC | 11.14 | 0.24 | 0.03 |
| SML.L | Strategic Minerals PLC | 0.06 | 1.11 | 1.07 |
| TRG.MC | Tubos Reunidos SA | 3.96 | 1.06 | 0.26 |
| ZIOC.L | Zanaga Iron Ore Company Ltd | 0.02 | 0.17 | 0.17 |
| Low | High | |
| Unlevered beta | 0.26 | 0.36 |
| Relevered beta | 0.22 | 0.33 |
| Adjusted relevered beta | 0.48 | 0.55 |
FXPO.L'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 FXPO.L:
cost_of_equity (7.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.