KFY
Korn Ferry
Price:  
73.33 
USD
Volume:  
624,775.00
United States | Professional Services
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KFY WACC - Weighted Average Cost of Capital

The WACC of Korn Ferry (KFY) is 7.3%.

The Cost of Equity of Korn Ferry (KFY) is 7.70%.
The Cost of Debt of Korn Ferry (KFY) is 5.40%.

Range Selected
Cost of equity 6.80% - 8.60% 7.70%
Tax rate 25.80% - 27.50% 26.65%
Cost of debt 4.50% - 6.30% 5.40%
WACC 6.4% - 8.2% 7.3%
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 0.63 0.67
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 8.60%
Tax rate 25.80% 27.50%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.50% 6.30%
After-tax WACC 6.4% 8.2%
Selected WACC 7.3%

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 (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.63) + 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.