IFF
International Flavors & Fragrances Inc
Price:  
79.06 
USD
Volume:  
1,129,431.00
United States | Chemicals
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IFF WACC - Weighted Average Cost of Capital

The WACC of International Flavors & Fragrances Inc (IFF) is 8.6%.

The Cost of Equity of International Flavors & Fragrances Inc (IFF) is 8.70%.
The Cost of Debt of International Flavors & Fragrances Inc (IFF) is 9.80%.

Range Selected
Cost of equity 7.40% - 10.00% 8.70%
Tax rate 13.30% - 15.50% 14.40%
Cost of debt 4.00% - 15.60% 9.80%
WACC 6.2% - 11.0% 8.6%
WACC

IFF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.00%
Tax rate 13.30% 15.50%
Debt/Equity ratio 0.46 0.46
Cost of debt 4.00% 15.60%
After-tax WACC 6.2% 11.0%
Selected WACC 8.6%

IFF'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 IFF:

cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.