KFY WACC - Weighted Average Cost of Capital

The WACC of Korn Ferry (KFY) is 7.1%.

The Cost of Equity of Korn Ferry (KFY) is 7.50%.

The Cost of Debt of Korn Ferry (KFY) is 5.40%.

	Range	Selected
Cost of equity	6.30% - 8.70%	7.50%
Tax rate	26.20% - 28.40%	27.30%
Cost of debt	4.50% - 6.30%	5.40%
WACC	6.0% - 8.3%	7.1%

WACC

KFY WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.54	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.70%

Tax rate	26.20%	28.40%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.50%	6.30%

After-tax WACC	6.0%	8.3%


Selected WACC	7.1%

KFY'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 KFY:

cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.54) + 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.